The state government levies professional tax on the income received by way of employment, profession, or trade. The tax amount applicable depends upon the profession and income of the taxpayer.
Professional Tax: An Overview
Professional Tax is a significant financial obligation for individuals engaged in various employments, trades, and professions across India. It is a mandatory contribution that aims to support state governments in providing essential services. In West Bengal, as in several other states, the structure and rates of professional tax play a crucial role in determining the financial responsibilities of professionals and businesses.
Understanding the nuances of professional tax slabs in West Bengal is essential for individuals and entities operating within the state. Unlike direct deductions from taxable income, professionals and businesses in West Bengal are required to adhere to specific regulations set by the state legislature.
This article delves into the intricacies of professional tax in West Bengal, shedding light on the applicable slabs, rates, and the legislative framework that governs this financial obligation.
Key Points About Professional Tax
- Tax rates vary based on an individual’s income.
- The maximum tax amount is capped at ₹2,500.
- Professional Tax is levied in 15 states across the country.
- The state government is granted the right to collect these taxes under Clause (2) of Article 276 of the Indian Constitution.
- Article 246 specifies that the exclusive and ultimate powers to modify tax slab rates lie with the parliament.
Classes of People: Applicability of Professional in India
The following people are liable to pay professional tax in West Bengal:
- Salaried individuals
- HUF (Hindu Undivided Family)
- A company, a body of individuals, a firm, a cooperative society, and others.
- Legal and medical practitioners
- Architects
- Engineers
- Chartered Accountants
- Tax & Management Consultants
- Licensed shopkeepers
- Occupier for factories
- Licensed shipping brokers & boat suppliers
Eligibility
Eligibility criteria for the payment of professional tax in West Bengal are defined by the “West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979.” Residents falling into the following categories are obligated to fulfill their professional tax liabilities:
- Salaried employees and wage earners in both public and private sectors have the tax deducted by their employers, who subsequently deposit it with the State Government.
- Self-employed individuals are personally responsible for the payment of professional tax. Additionally, those who are Non-Resident Indians (NRIs) should familiarize themselves with NRI income tax regulations when fulfilling their tax obligations.
The Commercial Taxes Department of the state of West Bengal is the designated authority for the collection of these taxes, with tax slab rates subject to variation as per the needs of the state.
Exemption from West Bengal Professional Tax Payment
The state government of West Bengal has the absolute power to exempt or reduce the professional tax for any selected class of professionals. For instance, the professionals belonging to auxiliary forces and the Navy and those drawing income from the Army or Air Force serving in any region within West Bengal are exempted from paying professional taxes.
Professional Tax in West Bengal
In WB, levies concerning professional taxes are governed by the West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979. You can find slab rates for various classes of professionals below:
Slab Rate for Salaried Individuals
| SALARY | PROFESSIONAL TAX AMOUNT/SLAB RATE |
| Less than ₹ 10,000 | Nil |
| ₹10,000 – ₹15,000 | ₹110 |
| ₹15,001 – ₹25,000 | ₹130 |
| ₹25,001 – ₹40,000 | ₹150 |
| ₹40,001 or more | ₹200 |
Slab Rates for Other Professionals
| INCOME | PROFESSIONAL TAX AMOUNT/SLAB RATE |
| Less than ₹60,000 | Nil |
| ₹60,000 – ₹72,000 | ₹ 480/annum |
| ₹72,000 – ₹84,000 | ₹540/annum |
| ₹84,000 – ₹96,000 | ₹600/annum |
| ₹96,000 – ₹1,08,000 | ₹1,080/annum |
| ₹1,08,000 – ₹1,80,000 | ₹1,320/annum |
| ₹1,80,000 – ₹3,00,000 | ₹1,560/annum |
| ₹3,00,000 – ₹5,00,000 | 2,000/annum |
| ₹5,00,000 or more | 2,500/annum |
Requisites For Professional Tax West Bengal
Self-employed individuals do not have to file any tax returns other than the Certificate of Enrollment and receipt of their annual tax payment. On the other hand, employers must file annual returns, pay monthly taxes, and obtain a Certificate of Registration.
It is essential to pay both professional and income tax to either run a business seamlessly or pursue a profession without regulatory worries.
Penalties for Non-Payment of Professional Tax
The individual or the company may have to pay a penalty due to the following reasons:
- Delay in the professional tax payment
- Failure to enroll for the Professional Tax within 90 days from the date of eligibility.
The penalty charges for late payments are generally around the rate of 1% of the total tax for every month. Having said that, since professional tax is a state levy, it has to be kept in mind that it varies across the states in the country and hence must be looked into carefully. This will help the individual and business, to prevent strict actions and penalties.
Conclusion
As we explore the professional tax landscape in West Bengal, it becomes evident that the state’s unique regulations and tax slabs shape the financial responsibilities of individuals and entities. From the maximum amount that can be levied to the specific rates based on income, navigating the professional tax landscape in West Bengal requires a comprehensive understanding of both state-specific nuances and the broader constitutional framework that empowers the levy of such taxes.
