SOME KEY POINTS TO BE NOTED REGARDING PROFESSIONAL TAX

Key talks:

• Professional Tax is compulsory to be paid.
• Professional Tax is imposed under Section 276(2) of the Indian Constitution.
• It is a state tax, i.e., collected by the respective state governments.
• Professional Tax is collected by the state governments for the welfare of unemployed persons and also for the overall improvement and welfare of respective places (on a regional basis).
• One common misconception about Professional Tax is that it is imposed on professionals only. Instead, it is levied on incomes earned from all kinds of professions, trades, and employments. Even, freelancers are required to pay Professional Tax.
• Based on the laws and regulations regarding Professional tax in a particular state, returns also have to be filed at regular intervals.
• There are penalties for non-compliance with the payment of Professional Tax.
• A penalty can be also imposed on anyone who furnishes incorrect details during registration or enrolment of Professional Tax.
• Professional Tax is deducted from income before deduction of income tax. Therefore, the amount deducted as Professional Tax can be displayed as a deduction from income, while filing the returns of Income Tax.
• There are some predetermined slabs (which may vary from state to state) based on which Professional Tax is deducted from any person after considering his/her income. 
• The maximum amount that can be charged from an individual as Professional Tax on an annual basis is Rs. 2500, irrespective of the state he/she belongs to.
• The due date for any individual who holds a Professional Tax Registration Certificate is June 30. Also, any delay in the submission of these returns shall result in interest of 1.25% per month.
• Those who hold Professional Tax registration are advised to get their respective bank payment invoices by the middle of June.
• Professional Tax is implemented in some states of India, while there are still some states and union territories in India that do any levy any Professional Tax on the residents.
• Professional Tax works as an important source of revenue for the state governments which have imposed it. In the case of salaried persons, there are some particular slabs based on which Professional Tax is calculated and then collected from them. In a similar manner, there are slabs for the income of people engaged in other professions and trades. And, based on those slabs, Professional Tax is levied.
• In the case of self-employed individuals, they have to pay their Professional Tax on their own, once a year.
• For employees working under an employer, they are not required to pay their Professional Tax directly. Instead, the employer collects the Professional Tax from his employees. In fact, this tax is deducted before the salary is credited. It is then the responsibility of the employer to submit the Professional Tax to the concerned state government.
• Generally, Professional Tax can be paid online in maximum states. But in some places, Professional Tax is collected by the local bodies. The employers and the self-employed persons, who are carrying out their respective professions in any such place, have to deposit Professional Tax with the local body assigned for the purpose.