Professional Tax
Professional Tax (PT) is a tax imposed by the Municipal Corporations of India in various states. No profession is exempted from paying this tax, however, it is levied based on the income of a particular profession. This tax is collected by the Commercial Tax Departments of all states and sent to the Municipal Corporation. If we talk on a smaller level, the workplace employer is responsible for collecting these taxes from the employees, and it is not just the employees from home tax is collected the employer himself has to pay profession tax too. There are also some states and union territories in India where professional tax is not applicable
Eligible for Registration
Every individual who has a monthly income of more than or equal to 7500 rupees can have a PT registration and pay the profession tax. For that, the employer must have a Professional Tax done. As mentioned earlier, in all workplaces employee has to collect the profession tax from the employees, and through a chain of people, it is sent to the municipal corporation. However, if an individual is working under more than one employer and has two or more jobs, the employer is not detecting professional tax from his or her wages. The individual is liable to have an enrollment certificate.
There are also plenty of benefits when it comes to PT registration. Some of them are:
- Statutory Requirement
- Avoid Penalty
- Easy Compliance
Documents for Registration
- Self-attested PAN card of proprietor
- The bank account of the proprietor with a cancelled cheque along with bank statement
- Passport size photos of the proprietor
- Driver’s license of proprietor
- Aadhaar card of proprietor
- Voter Card of proprietor
- Some utility bills
- Attendance and salary registers
- Authorization letter
- Address proof of the proprietor
States covered under Professional Tax
Almost all the states in India including Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Orissa, Andhra Pradesh, Assam, Tamil Nadu and Tripura to name a few levy professional tax, apart from Delhi.
Professional Taxpayers
Professional tax are applicable for both salaried and self-employed professionals who earn income by way of trade, business or any other means. Professional tax is charged as per applicable slab rate based on income of an individual. Salaried individuals and working professionals like doctors, engineers, chartered accountants and other professionals will have to pay more tax as the South Delhi Municipal Corporation (SDMC) has approved levying of professional tax.
According to the decision, salaried individuals and professionals like doctors and lawyers will have to pay professional tax if their monthly income is above ₹50,000.
The professional tax rate in Delhi
Professional Tax (PT) is a tax imposed by the Municipal Corporations of India in various states. No profession is exempted from paying this tax, however, it is levied based on the income of a particular profession. This tax is collected by the Commercial Tax Departments of all states and sent to the Municipal Corporation. If we talk on a smaller level, the workplace employer is responsible for collecting these taxes from the employees, and it is not just the employees from home tax is collected the employer himself has to pay profession tax too. There are also some states and union territories in India where professional tax is not applicable
Eligible for Registration
Every individual who has a monthly income of more than or equal to 7500 rupees can have a PT registration and pay the profession tax. For that, the employer must have a Professional Tax done. As mentioned earlier, in all workplaces employee has to collect the profession tax from the employees, and through a chain of people, it is sent to the municipal corporation. However, if an individual is working under more than one employer and has two or more jobs, the employer is not detecting professional tax from his or her wages. The individual is liable to have an enrollment certificate.
| Monthly Gross Salary | Amount Payable as Professional Tax |
| Up to Rs. 7500 | Nil |
| Rs.7501 to Rs.10,000 | Rs.175 Per month |
| Above Rs.10,000 | Rs. 2500 per annum. Can be paid in either way. Rs.200 per month except for February Rs.300 for February. |