An individual who earns their living by any means is subject to professional tax, which is levied by the state government. This is not to be confused with the definition of other professionals such as doctors or lawyers. This is a sort of tax that must be paid by every individual who earns money. This tax is calculated differently in each state, as is the amount collected. However, the annual limit has been established at Rs. 2500.

You'll see a modest deduction on your payslips, along with other components like HRA, conveyance, and basic salary breakups. This deduction, known as professional tax, is normally around Rs. 200. These taxes vary from state to state, and you may find that there is no deduction under this item in some states.

Who is responsible for collecting this tax?

Employers deduct a set amount from their employees' monthly salary as professional tax. The employer then pays the government a share of this sum. If they fail to do so, they may face fines for failing to collect or pay the professional tax. Also, if you do it for someone else, you will be responsible for paying the professional tax.

Your professional tax can be paid by registering for it through a form if you're an independent contractor who doesn't have an employer. The individual will be given a registration number once you receive the form. Professional tax payments can be paid at banks using these registration numbers. It's worth noting that in some places, the government will give you a tax break if you pay your taxes all at once for a couple of years. As a result, it is worthwhile to inquire about the professional tax rules in your state.

Why do different people's professional taxes differ?

State governments are responsible for collecting professional taxes, therefore they tend to be different in each one. Each state establishes a slab, based on which the professional tax is deducted. However, in India, only a few states and union territories do not levy a professional tax. It is paid by splitting the annual professional tax due into 12 equal monthly instalments. February is an exception, as it has a higher tax rate than the other months.

There may be instances where sources of revenue from distinct industries are subject to a separate tax. For example, in some jurisdictions, a person operating a transportation service may be required to pay a professional tax of around Rs. 50 per year for each car he owns. This could be limited to a maximum of Rs. 1,000 every year.

Tax slabs for professionals in various states

For professional taxes, each state has its own slab. The slabs for various Indian states and union territories are listed below :

Andhra Pradesh
Monthly Salary (in Rs.) Tax per month (in Rs.)
Upto 15,000 Nil
15,001 to 20,000 150
Above 20,000 200
Gujarat
Monthly Salary (in Rs.) Tax per month (in Rs.)
Upto 5,999 Nil
6,000 to 8,999 80
9,000 to 11,999 150
More than 12,000 200
Karnataka
Monthly Salary (in Rs.) Tax per month (in Rs.)
Upto 15,000 Nil
More than 15,000 200
Maharashtra
Monthly Salary (in Rs.) Tax per month (in Rs.)
7,500 to 10,000 175
Upto 7,500 for men Nil
Up to 10,000 for women Nil
10,000 and above 200 (And 300 for February)
Madhya Pradesh
Monthly Salary (in Rs.) Tax per month (in Rs.)
Upto 1.5 lakhs Nil
1.5 lakhs to 1.8 lakhs 125
1.8 lakhs and above 212
Odisha
Monthly Salary (in Rs.) Tax per month (in Rs.)
Upto 5,000 Nil
5,001 to 6,000 30
6,001 to 8,000 50
8,001 to 10,000 75
10,001 to 15,000 100
15,001 to 20,000 150
More than 20,000 200
Tamil Nadu
Monthly Salary (in Rs.) Tax per month (in Rs.)
Upto 21,000 Nil
21,001 to 30,000 100
30,001 to 45,000 235
45,001 to 60,000 501
60,001 to 75,000 760
More than 75,000 1095
West Bengal
Monthly Salary (in Rs.) Tax per month (in Rs.)
Upto 8,500 Nil
8,501 to 10,000 90
10,001 to 15,000 110
15,001 to 25,000 130
25,001 to 40,000 150
More than 40,000 200
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