Professional tax charges are relevant to everyone who is employed and earns regularly. When you receive a salary slip, professional tax is included there. It is usually mentioned after your gross salary, HRA, and allowance. It is deducted from your gross salary like other deductions, including EPF, TDS, and more. However, it is not mandatory that only the professionals like a doctor or lawyers are mandated to pay professional taxes. It is applicable to salaried employees as well. Let us discuss professional tax in detail for better understanding. As a salaried employee always wondering why professional tax is always included in your monthly slips, you will find all your answers about professional tax here.
What is Professional Tax?
Professional tax can be considered one of those terms that do not convey the title's literal meaning. In fact, the title may need to be clarified because, unlike it suggests, professional tax is not only chargeable for professionals.
As long as the income enters the tax slab, professional tax is mandated for all professions, employment, and trades. Moreover, it is levied on everyone, even freelancers, if the income surpasses the stated monetary threshold.
Ironically, although only the parliament of India holds power to dictate laws regarding union list that includes decisions regarding the tax on income, professional tax is an exception. It was, in fact, levied by the state government (not all of them). The only part that the central government played in the ruling was suggesting a maximum cap for professional tax. As per that suggestion, no state government can charge more than INR 2500 in a year as a professional tax from an individual. The amount is also based on an individual's profession, base salary, and his state's guidelines for professional tax. The deduction of professional tax was made official through the inclusion in Income Tax, 1961.
Professional Tax Charges for Various States
As mentioned earlier, professional tax in India has different guidelines for different states. Here is a list of professional tax charges that every individual state has mandated as per an individual's income:
Andhra Pradesh:
INR 150 per month for an income between INR 15000-20000. For an income above that, the professional tax is INR 200.
Assam:
INR 150 for an income between INR 10,001-15000. INR 180 for an income between INR 15001-24999. INR 208 for an income above that.
Bihar:
INR 83.33 for an income between INR 25001-41666. INR 166.67 for an income between INR 41667-83333. For an income above that, INR 208.33 is charged.
Goa:
INR 150 for an income between INR 15001-25000. INR 200 for an income above INR 25001.
Gujarat:
INR 80 for an income between INR 6000-8999. INR 150 for an income between 9000-11999. INR 200 for an income above that.
Jharkhand:
INR 100 for an income between INR 25001-41666. INR 150 for an income between 41667-66666. INR 175 for an income between 66667-83333. INR 208 for an income above that for the initial 11 months. INR 212 after that.
Karnataka:
INR 200 for an income above INR 15001.
Kerala:
INR 20 for an income between 2000-2999. INR 30 for an income between 3000-4999. INR 50 for an income between 5000-7499. INR 75 for an income between INR 7500-9999. INR 100 for an income between INR 10000-12499. INR 125 for an income between 12500-16666. INR 166 for an income between INR 16667-20833. INR 208 for an income above that.
Madhya Pradesh:
INR 125 for an income between INR 18751-25000. INR 167 for an income between INR 25001-33333. INR 208 for initial 11 months for an income above that. INR 212 from the twelfth month.
Maharashtra:
INR 175 for an income between INR 7501-10000. INR 209 for an income above that for the first 11 months. INR 300 from the twelfth month.
Manipur:
INR 100 for an income between INR 4251-6250. INR 167 for an income between INR 6251-8333. INR 200 for an income between INR 8334-10416. INR 208 and 212 for anything above that.
Meghalaya:
INR16.50 for an income between INR 4167-6250. INR 25 for an income between INR 6251-8333. INR 41.50 for an income between INR 8334-12500. INR 62.50 for an income between INR 125001-16666. INR 83.33 for an income between 16667-20833. INR 104.16 for an income between INR 20834-25000. INR 125 for an income between INR 25001-29166. INR 150 for an income between 29167-33333. INR 175 for an income between INR 33334-37500. INR 200 for an income between 37501-41666. INR 208 for an income between 41667.
Nagaland:
INR 35 for an income between INR 4001-5000. INR 75 for an income between INR 5001-7000. INR 110 for an income between 7001-9000. INR 180 for an income between INR 9001-12000. INR 208 for an income above that.
Odisha:
INR 125 for an income between 13305-25000. INR 200 for an income above that.
Pondicherry:
INR 83.33 for an income between INR 33334-50000. INR 125 for an income between INR 50001-66666. INR 166.67 for an income between INR 66667-83333. INR 208.33 for an income above that.
Punjab:
INR 200 for an income above 20833.
Sikkim:
INR 125 for an income between INR 20001-30000. INR 150 for an income between INR 30001-40000. INR 200 for an income above that.
Tamil Nadu:
INR 22.5 for an income between INR 3501-5000. INR 52.50 for an income between INR 5001-7500. INR 115 for an income between INR 7501-10000. INR 171 for an income between INR 10001-12500. INR 208 for an income above that.
Telangana:
INR 150 for an income between INR 15001-20000. INR 200 for an income above INR 20001.
Tripura:
INR 70 for an income between INR 5001-7000. INR 120 for an income between INR 7001-9000. INR 140 for an income between INR 9001-12000. INR 190 for an income between INR 12001-15000.
West Bengal:
INR 110 for an income between INR 10001-15000. INR 130 for an income between INR 15001-25000. INR 150 for an income between INR 25001-40000. INR 200 for an income between INR 40001 and above.
States that do not charge professional tax are as follows:
- Arunachal Pradesh
- Andaman and Nicobar
- Chandigarh
- Dadra and Nagar Haveli
- Daman and Diu
- Delhi
- Haryana
- Jammu and Kashmir
- Lakshadweep
- Rajasthan
- Uttranchal
- Uttar Pradesh
Conclusion
Professional tax charges in India is not a complex task. People just need to understand their state's income slabs for professional tax and pay accordingly. If you need more help, Lawgical India helps individuals and businesses with their tax filings, and you can contact our team of financial experts for the same.
