Profession tax payment is direct tax deducted by employer from the salary and is levied by the State Govt.
What is profession tax and its applicability??
Profession Tax payment is made by employer to the govt. It is deducted from gross salary of employees. Like TDS it is also deducted and deposited to the govt on or before due date.
Further it is an direct tax which is deducted and paid to state govt. If you earn salary, you are eligible to pay this tax.
This tax is deposited to state govt and hence rate is depends on the state where you live. Hence, maximum amount of Profession tax is Rs. 2,500.
Further, this tax is calculated on the basis of slab rate. And hence, each state have different slab rate for computation of profession tax.
Who charge Profession tax??
Profession tax is deducted by employer from gross salary along with TDS. And, it is deposited to the state govt. on or before due date as may be specified .
In brief profession tax is charged by the state govt. Further, it is depends on slab rate prescribed by the state govt.
Although it is direct tax but levied by the state govt. And it is deducted from income at the of time filing income tax return.
Profession tax rate
Again profession tax is direct tax but levied by state govt. Therefore, rate of profession tax is depends on slab rate prescribed by the state govt. The rates vary from state to state.
Further, provisions of the act empowers state govt. to charge profession tax and also provided maximum limit of Rs. 2,500. Beyond this limit profession tax cannot be charged.
Here are state which leavy profession tax such as
Karnataka, Maharashtra, Andhra Pradesh , West Bengal, Tamil Nadu, Telangana, Kerala, Gujrat, Bihar, Assam, Madhya Pradesh etc.
However, as profession tax is levied on the basis of slab rate. Therefore slab rate of different states are as follows:
1.Slab rate of Karnataka
Monthly salary or wages upto Rs. 15,000 = Nil
Monthly salary or wages above Rs. 15,000 = Rs. 200 Per month
2. Slab rate of Maharashtra
Monthly salary or wages upto Rs. 7,500 (Men) = Nil
Monthly salary or wages upto Rs. 10,000 (Women) = Nil
Above Rs. 7,500 upto 10,000 = Rs. 175 per month
Above Rs. 10,000 = Rs. 200 per month (Rs. 300 for last month)
3. Slab rate for Andhra Pradesh
Monthly salary or wages upto Rs. 15,000 = Nil
Monthly salary or wages upto Rs. 15,001 to 20,000 = Rs. 150 per month
Monthly salary or wages more than Rs. 20,000 = Rs. 200 per month
4. Slab rate for Gujarat
Monthly salary or wages upto Rs. 12,000 = Nil
Monthly salary or wages more than Rs. 12,000 = Rs. 200 per month
5. Slab rate for Gujarat
Monthly salary or wages upto Rs. 10,000 = Nil
Monthly salary or wages upto Rs. 10,001 to 15,000 = Rs. 150 per month
Monthly salary or wages upto Rs. 15,001 to 25,000 = Rs. 180 per month
Monthly salary or wages more than Rs. 25,000 = Rs. 208 per month
What are the consequences of non payment of profession tax??
Profession tax penalty is determined by the profession tax regulations of each state. If person fails to register, pay ,or file return of profession tax on or before due date than he shall be liable for interest ,late fees or penalty as the case may be.
Likewise, slab rate penal provisions of profession tax is varies from state to state. In brief, each state has its own penalty or interest rate for non payment or late payment of profession tax .
Hence,in the state of maharashtra -> if profession tax is not paid or is paid late, a penalty of 10% of the amount of tax will be levied.
Further, if delay in filing of return than penalty of Rs. 1000 to Rs. 2,000 per return will be charged.
Will deduction be available for the profession tax payment??
Yes, can claim deduction u/s 16(iii) of profession tax paid from gross salary while filing income tax return.
On whom profession tax payment is not applicable??
Every person earning income from salary is require to pay profession tax but there are some person who are exempt from profession tax payment.
Further, following are the person who are exempt from profession tax payment:
1. Member of Indian Army, Air Force or Navy
2. Individual suffering from mental or physical disability like blindness and deafness.
3. Further, parents of child suffering from disability
4. Temporary worker employed in factory like they for a day or week.
5. Moreover, individual running an educational institute
6. Any individual above 65 years
7. Lastly, foreign individual employed by the relevant state etc.
Frequently asked question
1.Who leavy Profession tax??
Profession tax is direct tax but levied by state govt. Therefore, rate of profession tax is depends on slab rate prescribed by the state govt. The rates vary from state to state.
2. Will deduction be available for the profession tax ??
Yes, can claim deduction u/s 16(iii) of profession tax paid from gross salary while filing income tax return.
3. Is profession tax applicable for union territory??
No,unlike income tax it is a direct tax but profession tax is governed by the central govt. Further union territory is under the administration of central govt therefore it is exempt from profession tax payment.
