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FinFIRST Blogs
Your monthly pay slip has a component called professional tax. It varies according to your state and income.
Paying tax is the duty of every citizen. It helps the government administer fairly and provide benefits to those who need it the most. You pay taxes on almost everything, including food, clothes, and fuel. Your income is also taxable, although it differs from the professional tax deducted from your income every month.
Income tax is well-known, but not many are aware of the professional tax beyond the term itself. Read below for a better understanding of professional tax and its variations as applicable for people under different income categories.
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What is professional tax?
Professional tax is levied by the state government and applies to employees of every sector, traders, and even freelancers. Since the state government has the liberty to choose whether to charge professional tax from their employees, not all states in India have the same.
Professional tax is also subject to the income of the person.
According to the rules of different states, only people who have income above a specific limit must pay professional tax. Hence, it is a form of income tax and is levied at the source whenever possible.
What is the professional tax rate?
Since it is the state government that levies professional tax, it can vary from one stat to the other. For instance, in Karnataka, people earning up to ₹15,000 per month are exempt from professional tax. For people with income above that, a tax of ₹200 is payable per month.
For Andhra Pradesh, people with an income of ₹15,000 per month and below do not have to pay professional tax. Incomes between ₹15,000 and ₹20,000 per month are taxable at ₹150 per month. For incomes above that, the tax is ₹200 per month. Let us now look at the tax rates of some other states.
State |
Income per month |
Professional tax per month |
Gujarat
|
Up to ₹5999 |
Nil |
₹6000 to ₹8999 |
₹80 |
|
₹9000 to ₹11999 |
₹150 |
|
Maharashta |
₹12000 and above |
₹200 |
|
Up to ₹7,500 |
Nil (for male) |
Up to ₹10,000 |
Nil (for female) |
|
From ₹7,500 to ₹10,000 |
₹175 (for male) |
|
₹10,000 onwards |
₹200 for 11 months + ₹300 for 12th month |
|
Telangana
|
|
Nil |
₹15,001 to ₹20,000 |
₹150 |
|
₹20,001 onwards |
₹200 |
|
Up to 5 years (For professionals such as legal practitioners, CA, architects, etc.) |
Nil |
|
Over 5 years (For professionals such as legal practitioners, CA, architects, etc.) |
₹2,500 (pe |
|
Kerala
|
Up to ₹11,999 |
Nil |
₹12,000 to ₹17,999 |
₹120 |
|
₹18,000 to ₹29,999 |
₹180 |
|
₹30,000 to ₹44,999 |
₹300 |
|
₹45,000 to ₹59,999 |
₹450 |
|
₹60,000 to ₹74,999 |
₹600 |
|
₹75,000 to ₹99,999 |
₹750 |
|
₹1,00,000 to ₹1,24,999 |
₹1000 |
|
₹1,25,000 onwards |
₹1250 |
|
West Bengal
|
Up to ₹10,000 |
Nil |
₹10,001 to ₹15,000 |
₹110 |
|
₹15,001 to ₹25,000 |
₹130 |
|
₹25,001 to ₹40,000 |
₹150 |
|
₹40,001 and above |
₹200 |
The states that do not levy professional taxes include:
- Arunachal Pradesh
- Himachal Pradesh
- Delhi
- Haryana
- Uttar Pradesh
- Uttarakhand
- Andaman and Nicobar Islands
- Daman & Diu
- Dadra and Nagar Haveli
- Lakshadweep
- Jammu & Kashmir
- Punjab
- Rajasthan
- Chandigarh
- Goa
Who should pay professional tax?
All professionals from all backgrounds must pay professional tax. Freelancers must do the same, although the amount varies depending on a state’s tax laws. Traders, businessmen, and businesswomen making regular income must also pay professional taxes as per their tax slabs.
Taxes are fundamental to a country’s economic strength and growth. Timely payment of taxes can help the government better plan subsidies and benefits for the underprivileged and fuel growth for future progress.
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirstbank.com for latest updates.
