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 is not as well known as Income Tax, as it is not as widely discussed as the latter. While the income tax is levied by the Central government, professional tax is levied by the state government on the earnings made by an individual by way of employment or profession. The professional tax is imposed by the municipal corporation of the respective states and the rates are determined by way of a fixed income tax slab for the assessment year 2022-23. Professional tax can be paid on a monthly, annual, or semiannual basis or can also be claimed as a deduction from the employee’s salary.
Professional Tax: An Overview
PT is applicable to all types of employment, trades, and professions. Self-employed professionals are also required to pay professional taxes. As per the Income Tax Act, of 1961, professional tax is deducted directly from the taxable income of the individual. On the other hand, self-employed professionals and business entities have to register themselves with the state legislature. While the power to levy the professional tax lies with the states, not all the states in the country levy professional taxes. In Professional tax:
- The rates of tax vary depending on the income of the individual.
- The maximum amount of the tax that can be levied is ₹2,500.
- A total of 15 states in India levy this tax.
- The right to collect these taxes are provided to the state government under Clause (2) of Article 276 of the Indian Constitution
- Article 246 states that the exclusive and final powers to make any changes in the tax slab rates are in the hands of the parliament.
Professional Tax Is Collected From the Following Classes of People
The following people are liable to pay the professional taxes in West Bengal:
- HUF (Hindu Undivided Family) – learn about Sec 80TTB
- A company, body of individuals, a firm, cooperative society, and others.
- Legal & Medical practitioners
- Chartered Accountants
- Tax & Management Consultants
- Licensed shopkeepers
- Occupier for factories
- Licensed shipping brokers & boat suppliers
The State Legislature in West Bengal formulated the “West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979” for the residents of the state. The following categories of people are liable to pay professional tax.
- For salaried employees and wage earners in public and private sectors, the employers deduct the professional tax from the income and deposit the same with the State Government
- Self-employed individuals are solely responsible to pay the professional tax themselves. Also, learn about NRI income tax rules, if you’re an NRI who is trying to pay taxes.
The organization that is finally responsible for the collection of these taxes is the Commercial Taxes Department of the state of West Bengal, the tax slab rates of which vary accordingly.
Click here to know in detail: Ptax Payment Certificate
Exemption from WB P 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
Taxation with respect to professional taxes is governed by the West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979. The slab rates are specified on the official website for various classes of professionals.
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 – Ptax West Bengal
|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|
The individuals who are involved in professions or trades have to pay a professional tax of Rs.2,500/annum, irrespective of the limits of the income or the turnover.
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. Employers must file annual returns, pay monthly taxes, and obtain a Certificate of Registration.
E-Payment of Professional Tax in West Bengal
Apart from the offline mode of the payment of taxes by visiting the Professional tax office, the p tax payment can be done online at the portal wbcomtax.co.in. Under the e-services section, click on the e-payment option available. Under this, further, an option of ‘GRIPS’ is available through which the p tax payment can be made easily and quickly.
Click here to know about the India tax calculation
The individual or the company may have to pay a penalty due to the following reasons:
- Delay in the p tax payment
- Failure of enrollment for the Professional Tax within 90 days from the date of eligibility.
The penalty charges for late payments are at the rate of 1% of the total tax for every month. This can again vary from state to state. It is essential to pay both professional tax and income tax to either run a business seamlessly or pursue a profession incessantly. Having said that professional tax is a state tax, it has to be kept in mind that it varies across the states in the country and hence must be looked into carefully. This could help the individual or the business, to prevent strict actions and penalties.
- Is Professional Tax Mandatory For Business?
- Process For Professional Tax Employer Registration
- Professional Tax Rates In India