Everything you need to know about Professional Tax

Published On: Dec 10, 2020Last Updated: Oct 14, 20233.2 min read

Every month you will see a tiny deduction, along with other deductions, when you see your wage slip. Currently, this deduction is around 200/- Rs under the professional tax bracket.

Professional tax varies from state to state, and no deduction can be found under the tax in some jurisdictions.

Also Read: What is Advance Tax Payment and how does it work?

Application of the profession Tax in compliance with India’s Constitution: Article 276 of the Constitution of India stipulates that the tax on occupations, trades, callings and jobs shall be assessed and collected by the provisions of this Act. All persons engaged in any profession, company, call, job, and falling within one or another of the classes mentioned in the second column of the Schedule shall pay the government tax to the State at the rate referred to in the third column of that Schedule against the class of such persons. Given that section 23 in the schedule applies only by notification of time to those groups of persons identified by the State Government.

What is the professional tax?

Professional tax is the tax that the State governments in India levied and collected. It’s a tax that is indirect. Anyone who earns wage incomes or a practitioner, such as an accountant, an accountant, a lawyer, a physician, etc., shall pay this professional fee. Various states have varying collection rates and processes. Every month, professional tax is levied in India.

Not all nations, however, enforce this levy. The states that charge professional taxes are Punjab, Uttar Pradesh, Karnataka, Bihar, western Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu and Gujarat. This tax applies to business owners, workers, traders and people who take on various jobs.

The professional tax is paid quarterly in Gujarat. If the company consists of fewer than 20 employees, the company or company has to pay PT tax within fifteen days after the end of the month. On the other hand, if the number of workers reaches 20, the company or company may pay a quarterly professional tax. Again, it must be carried out within 15 days of the end of the previous quarter.

  • The application for their employees’ registration should go to their tax offices within 30 days of the appointment date.
  • All workers are expected to file within 30 days from the date of appointment.
  • If the company owner has more than a corporation, registration applications must be filed for each authority separately in each jurisdiction if other laws and regulations are applicable.

Documents needed for the registration

Certificate of incorporation

Address proof    

Records of accounts

Salary and payslip details

A number of employees working. 

Profession Tax Slabs in Gujarat

Each individual registered for professional tax pays a certain amount every month, depending on the monthly salary. Whereas professional tax is typically payable by the taxpayer itself, it is done by the employers in trade and businesses.

Monthly Income of the TaxPayer

    Professional Tax Amount Payable (Per Month)

Monthly Income of the TaxPayer

Below Rs. 5999Rs. 6000 to Rs. 8999Rs. 9000 to Rs. 11999Rs 12000 and above
NILRs. 80Rs. 150    Rs. 200

Also Read: Corporate Tax in India: Overview, Tax Rates & Returns

Late Payment Penalty

At present, the following is applicable:

  • You must pay tax by the 15th of the next month when you have fewer than 20 workers.
  • But you must pay the tax before the 15th of a month after finishing every quarter if you have more than 20 workers.

Thus the dues dates for quarterly professional tax payment are 

15th July (for April to June quarter), 

15th October (for July to September quarter), 

15th January (for October to December quarter) and 

15th April (from January to March quarter).

The late payment penalty for professional tax is 18% per year in Gujarat for the unpaid tax measured daily.

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Shreeda Shah
About the Author

Shreeda Shah

Shreeda Shah is a Chartered Accountant associated with Legalwiz.in as a Business Advisor. She has a good expertise over Direct Taxation and Indirect Taxation compliances.