Everyone knows about Income Tax, but do you know about Professional Tax? If you are a working person, then of course you must have heard about it at some time or the other.
Everyone knows about Income Tax, but do you know about Professional Tax? If you are a working person, then of course you must have heard about it at some time or the other. Let us know everything about Professional Tax, which you should know.
Who imposes Professional Tax?
Professional tax is imposed by the state governments on people earning more than a fixed limit. These include not only employees working on salary, but this tax is also imposed on non-salaried people. Professional tax is an important revenue source of salary for the state governments. Let us tell you that whatever income the state governments get from professional tax, it is deposited in the treasury of the municipal corporation of the state government.
Deduction claim of professional tax
If a person’s net taxable income is under the Income-tax Act, 1961, then he can claim deduction of professional tax from his taxable income. Only after this he comes to know how much his net taxable income is. When it comes to employees, the employer deposits this tax on their behalf. This tax can be seen in both the employee’s Form-16 and his salary slip. This amount is deducted from taxable income. Under the Income Tax Act, no state can impose professional tax of more than Rs 2500 in a year. That is, it should not be more than Rs 208.33 per month.
Which states impose professional tax?
There are currently 21 states in India that impose professional tax. The salary limit is different in these states. In some states, a person earning more than Rs 4166 has to pay professional tax. In some states, this tax is levied when a person’s income is more than Rs 3 lakh. Let us tell you that this tax is not levied in any union territory and some other states like Delhi, Haryana, Uttar Pradesh and Uttarakhand.
In some states, people in some categories are exempted from this, one of which is the category of disabled people. The states imposing this tax include Andhra Pradesh, Karnataka, Maharashtra, Tamil Nadu, Assam, Kerala, Meghalaya, Tripura, Bihar, Jharkhand, Madhya Pradesh, West Bengal, Manipur, Mizoram, Odisha, Puducherry, Sikkim, Telangana, Nagaland, Chhattisgarh and Meghalaya. Let us tell you that a penalty is also levied for not paying professional tax.
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