Description

Professional Tax

 

Even though, all salary employees are known to tax as it is mentioned at payslips. But not all of them understand it.

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

 

Professional tax rate:

 

Moreover, the tax can vary from state to state. Each and every state has its own rules and regulations. By following rules and regulations as per Article 246 of the Constitution of India the tax rate, is decided. However, most states follow a slab-based system to pay salary tax.

The 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