Overview |
Exemptions |
Applicability |
Responsibilty |
Compliance |
Documents Required |
Responsibilty
In case there exists an employer-employee relationship, the responsibility to collect tax lies with the employer. Just like the TDS, professional tax is deducted while paying the salary for the month. The professional tax paid can be taken as a deduction from income tax for salaried employees.
Company, firms, LLP, Corporation, societies, HUF, Associations, clubs are a taxable entity. And they are also required to pay professional tax in capacity of their business. And the directors, partners are required to pay professional tax separately in capacity of their directorship and partnership respectively. Ie a firm with 2 partners shall be required to pay in total Rs. 7500 professional tax if there are no other employees employed.
Legal Practitioners like solicitors, Notaries, medical representatives like the dentist, medical consultants, doctors and other professionals like management consultants, tax consultants, surveyors, CS, CA, Insurance agents, engineers, architects and contractors are all considered as professional individuals who need to pay professional tax.
Overview
Professional Tax is a state tax levied on the income of the professional. It is also levied on trade, professions, freelancers and callings. The tax is levied based on income but is levied by state governments. The tax on income is a central subject, hence only states are empowered to make laws on profession, trade and callings. It is pertinent to note that, even though the professional tax is based on the income of the professionals but this is not an income tax. The tax is collected by the commercial tax department of various states and it ultimately reaches the municipal corporation funds
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