Professional Tax (PT) is a tax levied by some state governments in India on the income of salaried employees, professionals, and self-employed individuals. The specific rules, rates, and procedures for PT vary from state to state.
Key Aspects of Professional Tax in India
Levied by States
It’s not a central government tax. Each state has its own legislation governing PT.
Applicability
It applies to:
- Salaried employees (deducted by the employer).
- Professionals (e.g., doctors, lawyers, accountants).
- Self-employed individuals (e.g., freelancers, consultants, business owners).
Income Slabs and Rates
The tax is typically levied based on income slabs, with varying rates. The maximum amount that can be levied is capped at ₹2,500 per annum (as per Article 276 of the Constitution of India).
Deduction from Salary
For salaried employees, the employer deducts PT from their salary and remits it to the state government.
Registration
Professionals and self-employed individuals are usually required to register for PT with the relevant state government department.
Filing Frequency
The frequency of PT return filing varies by state (monthly, quarterly, or annually).
General Procedure for Professional Tax Return Filing (Illustrative, as it varies by state)
Registration
If you are a professional or self-employed individual, you will typically need to register with the relevant state’s tax department (e.g., commercial tax department). You’ll obtain a registration certificate and a PT identification number.
Payment of PT
- Salaried Employees: Employers deduct PT from the employee’s salary and pay it to the government.
- Professionals/Self-Employed: You need to pay the PT yourself, usually based on your income slab. Payment is generally made online through the state government’s portal.
Filing the Return
You need to file a periodic return (as per your state’s rules) declaring your income and the PT paid.
Forms
The specific forms for PT return filing vary by state.
Online Filing
Most states now have online portals for PT registration, payment, and return filing.
State-Specific Information (Examples)
Karnataka
The Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976, applies.
Tamil Nadu
There is no professional tax in Tamil Nadu.
Andhra Pradesh
The Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987, is in force.
West Bengal
The West Bengal Tax on Professions, Trades, Callings and Employments Act, 1979, is the relevant legislation.
Maharashtra
The Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975, governs PT. Returns are filed monthly by employers and annually by others.
Information Required for PT Return Filing (General):
- Your PT registration number.
- Your income for the relevant period.
- The amount of PT paid.
- Your PAN (Permanent Account Number).
- Your address and other details.
Penalties for Non-Compliance
Failure to register, pay, or file PT returns on time can result in penalties and interest, as determined by the specific state’s laws.
Get help from our tax experts for professional tax registration. Professional Tax (PT) is a state-level tax levied on individuals who earn income through employment, profession, trade, or calling. Unlike income tax (which is central), Professional Tax is governed by individual state governments in India. This means its applicability, rates, due dates, and filing procedures vary significantly from one state to another.