What is a professional tax?
Have you ever wondered why your take-home pay is not the same as your salary? The answer lies in professional tax - a tiny but important deduction that is making a big impact. So, what is professional tax (PT)?
Simply put, it is a small tax on the money you earn from your job or business. It is deducted from your gross salary along with components like ESI, EPF and TDS.
The Commercial Tax Department of the State Government collects professional tax to fund local public goods and services that benefit everyone. So, next time you see a deduction in your salary slip, remember it is not just a tax, it is a contribution to a better tomorrow. As per the Income Tax Act 1961 the maximum amount that any state can deduct is Rs. 2500 in a year.
Who files for Professional Tax Returns?
You are required to pay professional tax if you are engaged in any profession, trade, or employment, including:
- Salaried employees (check your salary slip for professional tax deductions)
- Self-employed professionals (e.g., lawyers, doctors, consultants)
- Business owners
- Freelancers
- Entrepreneurs
How are Professional Tax Rates Determined?
Are you trying to figure out how your professional tax rate is decided? Well, it is quite simple! You see, each state in India sets its own professional tax rate. And these rates are different for each state. Think of it like a customized fee for living and working in your state.
Here is how it works:
- Your state government decides the professional tax slab rates based on income levels.
- These rates are usually a small percentage of your income or a fixed amount.
- Some states even offer exemptions or discounts for certain professionals or income groups.
- India consists of 28 states and 8 union territories out of which 20 states and 1 union territory has professional tax.
- Professional Tax Slab Rate in Maharashtra
| Monthly Gross Salary | Amount Payable |
For Male Employees:
|
|
| Up to Rs. 7,500 | Nil |
| Above Rs. 7,501 to Rs. 10,000 | Rs. 175 per month |
| Above Rs. 10,001 | Rs. 200 per month - Rs. 200 per month excluding February
- Rs. 300 for the month of February
|
| For Female Employees: |
|
| Up to Rs. 25,000 | Nil |
| Above Rs. 25,001 | Rs. 200 per month- Rs. 200 per month excluding February
- Rs. 300 for the month of February
|
- Professional tax Slab rate in Andra Pradesh
| Monthly Gross Salary | Amount Payable |
| Up to Rs. 15,000 | Nil |
| Above Rs. 15001 to Rs. 20,000 | Rs. 150 per month |
| Above Rs. 20,001 | Rs. 200 per month |
- Professional tax Slab rate in Assam
| Monthly Gross Salary | Amount Payable |
| Up to Rs. 10,000 | Nil |
| Above Rs. 10,001 to Rs. 15,000 | Rs. 150 per month |
| Above Rs. 15,001 to Rs. 25,000 | Rs. 180 per month |
| Above Rs. 25,001 | Rs. 208 per month |
- Professional tax Slab rate in Bihar
| Yearly Gross Salary | Amount Payable |
| Up to Rs. 300000 | Nil |
| Above Rs. 300001 To 500000 | Rs. 1000 per year |
| Above 500001 To 1000000 | Rs. 2000 per year |
| Above 1000001 | Rs. 2500 per year |
Note: Every employer shall deduct the tax payable by every employee from the salary or wages payable to such employee in respect of the month of September every year.
- Professional tax Slab rate in Gujarat
| Monthly Gross Salary | Amount Payable |
| Up to Rs. 12,000 | Nil |
| Above Rs. 12,001 | Rs. 200 per month |
- Professional tax Slab rate in Jharkhand
| Yearly Gross Salary | Amount Payable |
| Up to Rs. 300000 | Nil |
| Above Rs. 300001 to Rs. 500000 | Rs. 1200 |
| Above Rs. 500001 to Rs. 800000 | Rs. 1800 |
| Above Rs. 800001 to 1000000 | Rs. 2100 |
| Above Rs. 1000001 | Rs. 2500 |
Note: Professional Tax is levied on yearly basis in Jharkhand
- Professional tax Slab rate in Karnataka
| Monthly Gross Salary | Amount Payable |
| Up to Rs. 24,999 | Rs. 200 per month |
- Professional tax Slab rate in Kerala
| Half Yearly Income | Amount Payable |
| Up to Rs. 11,999 | Nil |
| Above Rs. 11,999 to Rs. 17,999 | Rs. 320 |
| Above Rs. 18,000 to Rs. 29,999 | Rs. 450 |
| Above Rs. 30,000 to Rs. 44,999 | Rs. 600 |
| Above Rs. 45,000 to Rs. 999,99 | Rs. 750 |
| Above Rs. 1,00,000 to Rs. 1,24,999 | Rs. 1,000 |
| Above Rs. 1,25,000 | Rs. 1,250 |
- Professional tax Slab rate in Madhya Pradesh
| Yearly Gross Salary | Amount Payable | Remarks |
| Up to 2,25,000 | Nil | Nil |
| Above 2,25,001 To 3,00,000 | Rs. 1,500 | Rs. 125 per month |
| Above 300001 To 400000 | Rs. 2,000 | Rs. 166 per month for 11 months & Rs. 174 for 12th month |
| Above 400001 | Rs. 2,500 | Rs. 208 per month for 11 months & Rs. 212 for 12th month |
- Professional tax Slab rate in Manipur
| Yearly Gross Salary | Amount Payable |
| Up to Rs. 50,000 | Nil |
| Above Rs. 50,001 To Rs. 75,000 | Rs. 1,200 |
| Above Rs. 75,001 To Rs. 1,00,000 | Rs. 2,000 |
| Above Rs. 1,00,001 To Rs. 1,25,000 | Rs. 2,400 |
| Above Rs. 1,00,001 To Rs. 1,25,000 | Rs. 2,400 |
| Above Rs. 1,25,001 | Rs. 2,500 |
- Professional tax Slab rate in Meghalaya
| Monthly Gross Salary | Amount Payable |
| Up to 50,000 | Nil |
| Above Rs. 50,001 To Rs. 75,000 | Rs. 200 |
| Above Rs. 75,001 To Rs. 10,00,000 | Rs. 300 |
| Between Rs. 1,00,001 To Rs. 1,50,000 | Rs. 500 |
| Above Rs. 1,50,001 To Rs. 2,00,000 | Rs. 750 |
| Above Rs. 2,00,001 To Rs. 2,50,000 | Rs. 1,000 |
| Above Rs. 2,50,001 To Rs. 3,00,000 | Rs. 1,250 |
| Above Rs. 3,00,000 To Rs. 3,50,000 | Rs. 1,500 |
| Above Rs. 3,50,001 To Rs. 40,00,000 | Rs. 1,800 |
| Above Rs. 4,00,001 To Rs. 4,50,000 | Rs. 2,100 |
| Above Rs. 4,50,001 To Rs. 5,00,000 | Rs. 2,400 |
| Above Rs. 5,00,001 | Rs. 2,500 |
- Professional tax Slab rate in Mizoram
| Monthly Gross Salary | Amount Payable |
| Up to Rs. 5,000 | Nil |
| Above Rs. 5,001 To Rs. 8,000 | Rs. 75 per month |
| Above Rs. 8,001 to Rs. 10,000 | Rs. 120 per month |
| Above Rs. 10,001 To Rs. 12,000 | Rs. 150 per month |
| Above Rs. 12,001 to Rs. 15,000 | Rs. 180 per month |
| Above Rs. 15,001 | Rs. 208 per month |
- Professional tax Slab rate in Nagaland
| Monthly Gross Salary | Amount Payable |
| Up to Rs. 4,000 | Nil |
| Above Rs. 4,001 To Rs. 5,000 | Rs. 35 per month |
| Above Rs. 5,001 To Rs. 7,000 | Rs. 75 per month |
| Above Rs. 7,001 To Rs. 9,000 | Rs. 110 per month |
| Above Rs. 9,000 To Rs. 12,000 | Rs. 180 per month |
| Above Rs. 12,001 | Rs. 208 per month |
- Professional tax slab rate in Odisha
| Yearly Gross Salary | Amount Payable |
| Up to Rs. 1,60,000 | Nil |
| Above Rs. 1,60,001 To Rs. 3,00,000 | Rs. 1,500 |
| Above Rs. 3,00,001 | Rs. 2,400- Rs. 200 per month;
- Rs. 300 for the last month
|
- Professional tax slab rate in Puducherry
| Half Yearly Salary | Amount Payable Per Six Months |
| Up to Rs. 99,999 | Nil |
| Above Rs. 1,00,000 To Rs. 2,00,000 | Rs. 250 |
| Above Rs. 2,00,001 To Rs. 3,00,000 | Rs. 500 |
| Above Rs. 3,00,001 To Rs. 5,00,000 | Rs. 750 |
| Above Rs. 5,00,000 | Rs. 1,000 |
| Rs. 1,250 |
Note: Professional Tax is levied on Half yearly basis in Puducherry
- Professional tax slab rate in Punjab
| Monthly Gross Salary | Amount Payable |
| Above Rs. 20,833 | Rs. 200 per month |
- Professional tax slab rate in Sikkim
| Monthly Gross Salary | Amount Payable |
| Up to Rs. 20,000 | Nil |
| Above Rs. 20,001 to Rs. 30,000 | Rs. 125 per month |
| Above Rs. 30,001 to Rs. 40,000 | Rs. 150 per month |
| Above Rs. 40,001 | Rs. 200 per month |
- Professional tax slab rate in Tamil Nadu
| Half Yearly Gross Salary | Amount Payable |
| Up to Rs. 21,000 | Nil |
| Above Rs. 21,001 to Rs. 30,000 | Rs. 135 |
| Above Rs. 30,001 to Rs. 45,000 | Rs. 315 |
| Above Rs. 45,001 to Rs. 60,000 | Rs. 690 |
| Above Rs. 60,001 to Rs. 75,000 | Rs. 1025 |
| Above 75,001 | Rs. 1250 |
Note: Professional Tax is levied on Half yearly basis in Tamil Nadu
- Professional tax slab rate in Telangana
| Monthly Gross Salary | Amount Payable |
| Up to Rs 15,000 | Nil |
| Above Rs. 15,001 to Rs. 20,000 | Rs. 150 per month |
| Above Rs. 20,001 | Rs. 200 per month |
- Professional tax slab rate in Tripura
| Monthly Gross Salary | Amount Payable |
| Up to Rs. 7,500 | Nil |
| Above Rs. 7,501 To Rs. 15,000 | Rs. 150 per month |
| Above Rs. 15,001 | Rs. 208 per month |
- Professional tax slab rate in West Bengal
| Monthly Gross Salary | Amount Payable |
| Up to Rs. 8,500 | Nil |
| Above Rs. 8,501 To Rs. 10,000 | Nil |
| Above Rs. 10,001 To Rs. 15,000 | Rs. 110 per month |
| Above Rs. 15,001 To Rs. 25,000 | Rs. 130 per month |
| Above Rs. 25,001 to Rs. 40,000 | Rs. 150 per month |
| Above Rs. 40,001 | Rs. 200 per month |
|
|
So, your professional tax rate is determined by where you live and work, and how much you earn.
Where professional tax is not applicable?
Following are the states where professional tax is not levied:
- Daman and Diu
- Delhi
- Goa
- Haryana
- Himachal Pradesh
- Jammu and Kashmir
- Ladakh
- Lakshadweep
- Rajasthan
- Uttar Pradesh
- Uttarakhand
- Andaman and Nicobar Islands
- Arunachal Pradesh
- Chandigarh
- Chhattisgarh
- Dadra and Nagar Haveli
Is professional tax refundable?
Yes, professional tax is refundable in case you or your employer paid excess tax. You can claim a refund by filing your tax returns and providing the necessary documents.
How to Calculate and Pay Professional Tax?
Calculating and paying professional tax is easy!
- First, check if your state levies professional tax then deducts items like EPF etc. then you can calculate your professional tax based on your gross salary for that month.
- You can use online calculators or consult your employer or accountant, or you can see the breakdown of deductions and professional tax in form 16.
Ease the process of professional tax for employees by integrating Runtime HRMS and give the right information at the right time.
Pay your professional tax:
- Through your employer (if they deduct it from your salary)
- Online through the state tax department's website
- Offline at designated tax offices or banks
Remember to keep your payment receipt safe for future reference!
How to file a professional tax return?
The procedure for professional tax return filing varies, slightly depending on the state regulations, but the general steps are as follows:
- Get Registration: Secure a professional tax registration certificate from your state authority.
- Calculate Tax Liability: Based on your income earned and occupation determine applicable slab and rate.
- Collect Necessary Documents: Get your all-essential documents, including salary/wage slips, proof of tax payment, and other relevant papers.
- Prepare and Submit Return: Prepare your return in the advised format by the state government and submit it along with required documents.
- Pay Tax Liability: Pay your Professional Tax due, if any, along with the return.
- Get Confirmation: Get acknowledgment of return filing and tax payment from the state authority.
Who is exempted from professional tax?
According to the act by Maharashtra State Tax on Professions, Traders, Callings and Employment Act, 1975 these are exempted individuals -
- Senior Citizens
- Disabled Persons
- Temporary Workers
- Parents of Disabled Children
- Women Agents (Mahila Pradhan Kshetriya Bachat Yojana)
Compliance with Runtime HRMS
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