All You Need to Know About Professional Tax
Professional tax is an indirect tax, which is mainly imposed by the State Government, Special Urban Body (Municipal Corporation) on persons working in government and non-government services, chartered accountants, doctors, lawyers and traders engaged in other business activities.
The special “persons” governed under Schedule I of the Professional Tax Act, who are liable to pay professional tax, have been segregated into various categories and shown in 21 entries.
What would be the rate of professional tax for persons classified in different categories, has been made available in Schedule I. Professional tax is a source of revenue for the government, which helps the state governments to run schemes like employment guarantee.
The state governments in India that impose professional tax
The state governments in India that impose professional tax are – Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Maharashtra, Meghalaya, Madhya Pradesh, Orissa, Karnataka, Kerala, Tamil Nadu, Tripura, West Bengal and other states – Haryana, Uttar Pradesh Union Territory In which Delhi and Chandigarh are also included.
Employers are given the responsibility to deduct profession tax from the salary of the employees.
The professional tax of the employee who is in service is deducted by the employer and deposited with the government from the place where the company’s office is located.
Professional tax is treated like income tax. Income tax exemption is available on the amount of professional tax deducted.
Obtaining certificate of exemption from liability for non-payment of professional tax
A person who is deemed to be exempt from the liability of paying profession tax has to obtain a certificate of exemption from the profession tax authority within one month.
In the case where a person is appointed in a specified company, a certificate of being placed in the payroll is obtained after the appointment. If the work of the company is conducted in other states also, then the employer has to inform the authority of that state about the place, which comes under the jurisdiction of that state.
Professional tax rate that is levied
Professional tax rate varies from state to state. The state governments determine the rate of professional tax on the basis of the type of business, the duration of the business and the turnover of the total income.
If a maximum of Rs 2400 is given as annual professional tax, then it can be calculated only if the previously specified rate of salary of that person is available. Payment of Professional Tax Challan no. 8 is done.
Professional Tax Payment Method
Rajkot Municipal Corporation itself had started online submission of profession tax. With this effort, a person can deposit his professional tax online and he will not have to present himself in government offices to deposit it.
It has also been learned that the Municipal Corporation is also providing the facility of depositing professional tax through net banking facility.
