Profession Tax & Slab Rates in India

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A profession tax is levied by individual state governments on persons who earn their living through employment, trade or professional work. The clause (2) of Article 276 of the Constitution of India gives permission to the states to levy this tax on persons practicing/earning a salary in their territory.

The amount of profession tax to be paid varies from one state to another and also depends on slab rates fixed by state governments. The maximum limit for Profession Tax is Rs. 2,500 per annum.

Since profession tax is levied by the state government, any amount paid as profession tax for that financial year is allowed for deductions on the income tax to be paid. The deductions are applicable as under Section 16 of the Income Tax Act.

While a person earning an income will pay Profession Tax through their employers (deducted by the employers from the salary), the others need to pay it in person.

Profession Tax can be paid through registrations to local authorities, which is mostly state governments and in some cases, the local panchayats and other authorized bodies.

Profession Tax in various states of India

Andhra Pradesh

In Andhra Pradesh, the profession tax is levied upon by the rules and regulations set through the Andhra Pradesh Tax on Profession, Trades, Callings and Employment Act, 1987. The profession tax slab rates in the State are as follows:

Earnings Per Month

Tax levied in rupees per month (Rs. Per Month)

Up to 15,000

Nil

Rs. 15, 001 to 20,000

150

Rs. 20,000 and above

200

Bihar

In Bihar, the slab rates for profession tax on individual tax payers are as given in the table:

Salary Earned

Profession Tax to be paid

Up to 25.000

Nil

25,001 to 41, 666

83.33

41,667 – 83,333

166.67

83,334 and above

208.33

Gujarat

The profession tax laws in the State of Gujarat are governed by the Gujarat panchayats, municipalities, municipal corporations and state tax on the Professions, Traders, Callings and Employment Act, 1976. The slab rates, as fixed by the state, are as follows

Salary Earned

Profession Tax to be paid

Up to 5,999

NIL

6000 – 8999

80

9000 – 11,999

150

12, 000 and above

200

Additional information about profession tax in Gujarat and the forms to be filled for registration of Profession Tax in the state.

Karnataka

Profession Tax slabs in Karnataka and the tax itself is levied with respect to the rules and regulations put forth through the Karnataka tax on Profession, Callings and Employment Act, 1976. The slab rates of the State are as follows:

Salary Earned

Profession Tax to be paid

Up to 15,000

Nil

15,001 and above

200 per month

Kerala

The profession tax slabs in Kerala are as follows:

Salary Earned

Profession Tax to be paid

Up to 1,999

Nil

2,000 – 2,999

20

3,000 – 4,999

30

5,000 – 7499

50

7,500 – 9,999

75

10,000 – 12, 499

100

12,500 – 16,666

125

16,667 – 20,833

166

20, 834 and above

208

Madhya Pradesh

The Madhya Pradesh Vritti Kar Adhiniyam, 1995 has put forth rules and regulations to levy profession tax in the state. The state has also published a notice in the MP Gazette, Notification No. 174 dated 31/03/2012, through which the slab rates have been revised and valid with effect from 1/04/ 2012.

The slab rates in the state are as follows

Salary Earned

Profession Tax to be paid per month

Up to 12,500

Nil

12,500 to 14,999

125

15,000 and above

208 from April to Feb and 212 if paid in March

Maharashtra

Profession tax in Maharashtra is levied with reference to the Maharashtra State Tax on Professions, Trades, Callings and Employment Act, 1975 and came into effect from 1/04/1975. The slab rates in the state are as follows:

Salary Earned

Profession Tax to be paid

Up to 7500

Nil

7501 and 10,000

175

10,001 and above

200 per month (300 for February)

The Maharashtra government has a composition scheme for tax payers through which an advance of 10,000 as a lump sum payment can be paid for 5 years of tax.

Tamil Nadu

The Town Panchayats, Municipalities and Municipal corporations Rules, 1988, put forth by the Tamil Nadu government governs the collection of Profession Tax in the state.

The slab rates for profession tax in Tamil Nadu are as follows:

Salary Earned

Profession Tax to be paid

Less than 3,500

Nil

3501 – 5,000

16.66

5,001 – 9,000

40

9001 – 12,500

126.67

12,5001 and above

182.50

West Bengal

The West Bengal State Tax on Professions, Trades, Callings and Employment Act, 1979, authorizes the collection of profession tax in India. The slab rates, with effect from 1/04/2013, is as follows:

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Salary Earned

Profession Tax to be paid

Up to 8500

Nil

8501 – 10,000

90

10,001 – 15.000

110

15,001 – 25,000

130

25001 – Rs.40,000

150

40,001 and above

200

The West Bengal government levies a fine of 1% per month in case of late payments.

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A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.

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