How is Professional Tax Deducted from Our Salary?

Last Updated at: July 14, 2020
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How is Professional Tax Deducted from Our Salary

We receive a lot of questions from working individuals regarding what is a professional tax and how is Professional Tax Deducted from Salary. Many people wonder why the deduction of professional tax from salary is necessary and why it appears in their Form 16 or payslips. 

In this blog, we are giving a true picture of professional tax details, professional tax rates, and their compliances.

  1. What is the professional tax?

  2. How is professional tax deducted salary from the salary?

  3. What are the professional tax rates or slabs?

  4. West Bengal professional tax slab

  5. Kerala professional tax slab

  6. Tamil Nadu professional tax slab

  7. What are the consequences of not paying professional tax?

  8. FAQs

What is the professional tax?

Unlike suggested by the term, professional tax is not a tax levied on the professionals alone. This tax is levied on any individual who earns a livelihood through profession, employment, trade or calling. 

How is professional tax deducted from the salary?

As per provisions mentioned in Clause (2), Article 276 of the Indian Constitution, the right to levy and collect professional tax is bestowed on the State Governments. Many Indian states have opted not to exercise this right as well. In all the States where it is applicable, this tax is charged based on professional tax slabs as enacted by the respective States. However, no state can levy professional tax beyond ₹ 2,500 on any taxpayer in a year. Professional tax payment is allowed as a deduction from taxable income as per the Income-tax Act, 1961. 

For salaried employees, professional tax is deducted from salary by the employer and is paid to the concerned department of the State Government. The self-employed individuals need to get a ‘Certificate of Enrolment’ from the concerned State authority for deduction of professional tax from salary and pay to the Government. 

What are the professional tax rates or slabs?

The professional tax rates and slabs vary from one state to another. For illustration, we will have a look at the professional tax slabs in three states, West Bengal, Kerala and Tamil Nadu

West Bengal professional tax slab

The web professional tax slab is depicted below in tabular form-

Monthly salary (₹) Tax per month (₹)
Up to ₹ 10,000/- NIL
From ₹ 10,001/- to ₹ 15,000/- ₹ 110/-
From ₹ 15,001/- to ₹ 25,000/- ₹ 130/-
From ₹ 25,001/- to ₹ 40,000/- ₹ 150/-
Above ₹ 40,001/- ₹ 200/- 

Professional Tax Slab in Kerala*

Monthly salary (₹) Tax per month (₹)
Less than ₹ 2000/- NIL
From ₹ 2,000/- to ₹ 2,999/- ₹ 20/-
From ₹ 3,000/- to ₹ 4,999/- ₹ 30/-
From ₹ 5,000/- to ₹ 7,499/- ₹ 50/-
From ₹ 7,500/- to ₹ 9,999/- ₹ 75/-
From ₹ 10,000/- to ₹ 12,499/- ₹ 100/-
From ₹ 12,500/- to ₹ 16,666/- ₹ 125/-
From ₹ 16,667/- to ₹ 20,833/- ₹ 166/-
Above ₹ 20,834/- ₹ 208/- (₹ 212/- for February)


* Collected every 6 months

Get Professional Tax Registration

 Professional Tax Slab in Tamil Nadu

Monthly salary (₹) Tax per month (₹)
Up to ₹ 3,500/- NIL
From ₹ 3,501 to ₹ 5,000/- ₹ 22.50/-
From ₹ 5,001 to ₹ 7,500/- ₹ 52.50/-
From ₹ 7,501 to ₹ 10,000/- ₹ 115/-
From ₹ 10,001 to ₹ 12,500/- ₹ 171/-
Above ₹ 12,501/- ₹ 208/-

 

* Collected every 6 months

What are the consequences of not paying Professional Tax?

Different states have different legislation in place to ensure compliance of professional tax. Therefore, the penal interest or amount of penalty for non-compliance may vary from one state to another. Usually, a penalty is imposed on a taxpayer for failing to register for professional tax. Penal provisions are also there for non-payment of professional tax and for failing to file the return within the due date.

Frequently asked questions

  1. How much professional tax is deducted from salary?

As per Article 276 (2) of the Indian Constitution, a maximum annual amount of Rs 2500 can be deducted from the salary of any individual. However, the professional tax is remitted to the state and every state can fix its own limit of monthly salary amount to levy the professional tax on. For example, the State of Karnataka charges no professional tax on a monthly salary up to Rs 15,000. Above this limit, a professional tax of Rs 200 per month is charged on a salaried individual.

2. What is the salary range for professional tax calculation?

The professional tax is a  State subject and every state can fix its own limit of monthly salary amount to levy the professional tax on. For example, the State of Karnataka charges no professional tax on a monthly salary up to Rs 15,000. Above this limit, a professional tax of Rs 200 per month is charged on a salaried individual.

3. Is professional tax exempted?

Professional Tax is compulsory for all working individuals and professionals. The amount paid towards Professional Tax is exempted from Income Tax. 

4. How much professional tax is deducted from salary in India?

As per Article 276 (2) of the Indian Constitution, a maximum annual amount of Rs 2500 can be deducted from the salary of any individual.

 

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How is Professional Tax Deducted from Our Salary?

173

We receive a lot of questions from working individuals regarding what is a professional tax and how is Professional Tax Deducted from Salary. Many people wonder why the deduction of professional tax from salary is necessary and why it appears in their Form 16 or payslips. 

In this blog, we are giving a true picture of professional tax details, professional tax rates, and their compliances.

  1. What is the professional tax?

  2. How is professional tax deducted salary from the salary?

  3. What are the professional tax rates or slabs?

  4. West Bengal professional tax slab

  5. Kerala professional tax slab

  6. Tamil Nadu professional tax slab

  7. What are the consequences of not paying professional tax?

  8. FAQs

What is the professional tax?

Unlike suggested by the term, professional tax is not a tax levied on the professionals alone. This tax is levied on any individual who earns a livelihood through profession, employment, trade or calling. 

How is professional tax deducted from the salary?

As per provisions mentioned in Clause (2), Article 276 of the Indian Constitution, the right to levy and collect professional tax is bestowed on the State Governments. Many Indian states have opted not to exercise this right as well. In all the States where it is applicable, this tax is charged based on professional tax slabs as enacted by the respective States. However, no state can levy professional tax beyond ₹ 2,500 on any taxpayer in a year. Professional tax payment is allowed as a deduction from taxable income as per the Income-tax Act, 1961. 

For salaried employees, professional tax is deducted from salary by the employer and is paid to the concerned department of the State Government. The self-employed individuals need to get a ‘Certificate of Enrolment’ from the concerned State authority for deduction of professional tax from salary and pay to the Government. 

What are the professional tax rates or slabs?

The professional tax rates and slabs vary from one state to another. For illustration, we will have a look at the professional tax slabs in three states, West Bengal, Kerala and Tamil Nadu

West Bengal professional tax slab

The web professional tax slab is depicted below in tabular form-

Monthly salary (₹) Tax per month (₹)
Up to ₹ 10,000/- NIL
From ₹ 10,001/- to ₹ 15,000/- ₹ 110/-
From ₹ 15,001/- to ₹ 25,000/- ₹ 130/-
From ₹ 25,001/- to ₹ 40,000/- ₹ 150/-
Above ₹ 40,001/- ₹ 200/- 

Professional Tax Slab in Kerala*

Monthly salary (₹) Tax per month (₹)
Less than ₹ 2000/- NIL
From ₹ 2,000/- to ₹ 2,999/- ₹ 20/-
From ₹ 3,000/- to ₹ 4,999/- ₹ 30/-
From ₹ 5,000/- to ₹ 7,499/- ₹ 50/-
From ₹ 7,500/- to ₹ 9,999/- ₹ 75/-
From ₹ 10,000/- to ₹ 12,499/- ₹ 100/-
From ₹ 12,500/- to ₹ 16,666/- ₹ 125/-
From ₹ 16,667/- to ₹ 20,833/- ₹ 166/-
Above ₹ 20,834/- ₹ 208/- (₹ 212/- for February)


* Collected every 6 months

Get Professional Tax Registration

 Professional Tax Slab in Tamil Nadu

Monthly salary (₹) Tax per month (₹)
Up to ₹ 3,500/- NIL
From ₹ 3,501 to ₹ 5,000/- ₹ 22.50/-
From ₹ 5,001 to ₹ 7,500/- ₹ 52.50/-
From ₹ 7,501 to ₹ 10,000/- ₹ 115/-
From ₹ 10,001 to ₹ 12,500/- ₹ 171/-
Above ₹ 12,501/- ₹ 208/-

 

* Collected every 6 months

What are the consequences of not paying Professional Tax?

Different states have different legislation in place to ensure compliance of professional tax. Therefore, the penal interest or amount of penalty for non-compliance may vary from one state to another. Usually, a penalty is imposed on a taxpayer for failing to register for professional tax. Penal provisions are also there for non-payment of professional tax and for failing to file the return within the due date.

Frequently asked questions

  1. How much professional tax is deducted from salary?

As per Article 276 (2) of the Indian Constitution, a maximum annual amount of Rs 2500 can be deducted from the salary of any individual. However, the professional tax is remitted to the state and every state can fix its own limit of monthly salary amount to levy the professional tax on. For example, the State of Karnataka charges no professional tax on a monthly salary up to Rs 15,000. Above this limit, a professional tax of Rs 200 per month is charged on a salaried individual.

2. What is the salary range for professional tax calculation?

The professional tax is a  State subject and every state can fix its own limit of monthly salary amount to levy the professional tax on. For example, the State of Karnataka charges no professional tax on a monthly salary up to Rs 15,000. Above this limit, a professional tax of Rs 200 per month is charged on a salaried individual.

3. Is professional tax exempted?

Professional Tax is compulsory for all working individuals and professionals. The amount paid towards Professional Tax is exempted from Income Tax. 

4. How much professional tax is deducted from salary in India?

As per Article 276 (2) of the Indian Constitution, a maximum annual amount of Rs 2500 can be deducted from the salary of any individual.

 

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