Professional Tax is a tax which is levied at the state level in our country. People who practice a profession of a Chartered Accountant, Cost Accountant, Lawyer, Company Secretary, Doctor or are a Businessperson/Merchant and earn through such professions are liable to pay professional tax in some states of the country. Out of the 29 states and 7 union territories, some of the states which currently impose professional tax in India are Karnataka, Tamil Nadu, Bihar, Andhra Pradesh, Maharashtra, Assam, Kerala, Telangana, Gujarat, Meghalaya, Odisha, Madhya Pradesh, West Bengal, Tripura and Sikkim. As aforementioned, businesspersons, individual workers and merchants come under this tax is ambit. Professional tax is levied by the Municipal Corporation/ authority of any state and union territory. It is levied through predetermined tax slabs and is paid on monthly basis. It is payable by private company employees or may also be payable by people who earn salary in general.Article 276 of the Indian Constitution describes that the Professional Tax shall be imposed as a tax on professions, trades, callings and employments. It also remarks that each individual who is engaged in any profession/trade/calling/employment and lying under one or the other classes mentioned in the article is schedule shall be a party to this tax and shall be liable to pay the tax to the State government at a preannounced rate mentioned in the article is schedule.
Professional Tax has a slab based structure and it is dependent on the gross income of the professional or the salaried employee who is paying said tax. It is deducted monthly from each individual employee's salary. If the professional in question is a director or a partner of a company, then the said tax is deducted after the gross turnover of the company has been calculated and the said employee's annual earning is clear. However, in states such as West Bengal the payment of professional tax is not dependent on the employee's company's turnover.
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