Professional Tax
Professional tax is a tax collected by state legislatures in India on salaried employees and experts like legal counsellors, specialists, draftsmen, and so on., who are compensated for their work or profession. The tax is gathered by state legislatures and is utilized for the improvement of the state. Professional tax is generally deducted from a worker’s compensation by the business and kept with the public authority.
The rate of the professional tax is set by the state government and varies from state to state. The tax is typically assessed on a monthly or annual basis, and the amount is determined by the employee or professional’s salary or income. A state government may not impose a professional tax in excess of Rs. 2,500 annually.
It is the responsibility of employers to deposit professional tax with the government and deduct it from the wages of their employees. Penalties and legal action may be taken against you if this is not done. The tax is paid directly to the government by professionals who are not employed by any organization. Professionals and employees who earn less than a certain amount of money or who are over a certain age qualify for exemptions in some states.
In general, professional tax contributes to the financing of a variety of development initiatives and is a significant source of revenue for Indian state governments. Employers and professionals alike need to be aware of their professional tax obligations to avoid legal or financial repercussions.