Description

Professional Tax

 

All salary employees are known to Professional tax as it is mentioned at payslips. But not all of them understand it.

Professional tax is not only paid by professionals, But it is also levied by all employers, traders, freelancers  who  take salaries. Professional tax basically is an amount of money which is deducted from salary by the state government. Only Parliament has the exclusive power to make laws with respect to the Union List which includes taxes, as per the Article 246 of the Constitution of India says. 

 

Professional tax rate:

 

Professional tax can vary from state to state. Each and every state has its own rules and regulations. By following rules and regulations as per the Article 246 of the Constitution of India the tax rate i s decided. Most of the states follow a slab based system to pay salary tax.

 

Professional tax applies on:

 

1. Companies and Business Firms

 

2. Limited Liability Partnerships (LLP)

 

3. Corporations

 

4. Co-op Societies and Associations

 

5. Hindu Undivided Family

 

6. Clubs

 

7. Lawyers and Legal practitioners

 

8. Contractors

 

9. Architects

 

10. Engineers

 

11. Insurance agents

 

12. Chartered Accountants (CA)

 

13. Company Secretary (CS)

 

14. Surveyors

 

15. Tax consultants

 

16. Management consultants

 

17. Doctors and other medical representatives

 

Rate of Tax in Punjab

 

The rate of tax, as provided in the Punjab State Development Tax Act, 2018, are  as follows:

 

1. Every individual who is assessable under the Head Income from Wages as per the Income Tax Act, 1961.

 

Rs. 200/- per month

 

2. Every individual who is assessable under the Head Income from Business and Profession as per the Income Tax Act, 1961.

 

Rs. 200/- per month