Professional Tax

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What do you mean by Professional Tax?

Professional Tax

Many salaried staff members may know the term Professional Tax, as it is in the payslips/Form 16 issued in their name. But all of them may or may not realize what it is and why is it there.

What is professional Tax, and who is responsible for collecting it?

Professional Tax is collected by the State Government from the individuals who earn their living through any medium with a limit of Rs. 2500 annually. The central government makes laws regarding the taxes in the country. The state government can decide whether to levy the professional tax. Under Article 276, the state governments also have the power to make laws regarding Professional tax. 

The professional tax is one of the phrases that doesn’t entirely transmit the fundamental concept of the definition. Unlike the actual label indicates, it is not just the income tax levied on pros. It is an income tax on a myriad of careers, investments, and jobs and assessed based on the money of this occupation, work and industry. It is levied on employees, folks carrying about the company including virtual assistants, experts, etc.

Depending on Article 246 associated with the Constitution of India, only the Parliament gets the power to render the rules regarding the Union List, including fees on revenue.

What is the process for paying professional taxes? Is there a tax return to be filed?

This is once more a question. It is undoubtedly state-specific. Professional tax can be paid online/offline. Furthermore, depending on the State’s prerequisite, specialist taxation statements also need to be recorded at specific intervals.

Professional Tax Registration and Returns

Professional taxation Registration is required within thirty days of hiring staff inside an enduring company or, when it comes to specialists, 1 month right away associated with rehearsing. Professional income tax has to be subtracted through the wage or income. Therefore, the application for the Registration certification must be sent to the assessee’s status income tax department within thirty days of hiring the staff

Professional Taxation in India

The maximum amount of professional tax which any state in India can enforce is INR 2500/-. The Professional Tax is a supply of income for the state authorities that will help carry out techniques for the benefit and growth of the location. Professional Tax is taken off from the companies through the wage of the salaried staff and is placed with the local government. Some other persons spend it right to the federal government or through the neighbourhood systems to take action.


✅ How does professional taxation work?

For example, if you make Rs. 20,000 per month as a working professional in Gujarat, your monthly professional Tax would be Rs. 200, and your yearly professional Tax will be Rs. 2400.

✅ How is professional Tax deducted from a person’s salary?

Your employer will deduct professional Tax depending on your pay bracket from your gross income every month and return it to the State, as stated in Article 276(2) of the Indian Constitution when you are a salaried individual.

✅ Is professional Tax refundable?

By filing income tax returns for that fiscal year, a person might seek a refund of the excess Tax paid/deducted during that year. To receive a rebate under the Income Tax Act, a person must file their return for the applicable assessment year by July 31 (unless the deadline is extended).

✅What is the due date for filing a Tax return?

All businesses and employees with enrollment certificates must submit their tax returns before 30 April every year. Employers with enrollment certificates must submit tax returns within 60 days after the end of the fiscal year.