Professional Tax (PT)

When you look at your payslip or salary slip, along with the deduction column, you will notice a deduction marked as “PT”. PT or Professional Tax, as it is called, is a tax paid to the state government.

If you are looking to find out what PT is, you are in the right place. In this post, we will be discussing about Professional Tax.

Every employee has to pay PT based on his/her earnings. The employer deducts the tax from the salary and remits it to the state government account every month in a specified format.

Professional tax is a state-specific tax. Each state will have separate PT rates. Also, not all states collect or impose Professional taxes.

First, let us take a look at the states which impose PT.

States which impose PT or Professional Tax

States which collect or impose PT are:

• Andhra Pradesh
• Maharashtra
• Gujarat
• New Delhi
• Karnataka
• Tamil Nadu
• Madhya Pradesh
• West Bengal

Know more – Professional tax for different states 

Who deducts PT?

If you are a professional working under an employer, then you need not have to worry about anything. It is upto the employer to deduct PT and pay it to the state government.

If the employer fails to deduct and pay the Professional Tax, they will have to pay penalties.

However, if you are not working for anyone, then you are liable to pay the professional tax by yourself.

In case of late payment or non-payment of Professional Tax, the penalty will be 10% of the taxable amount.

What is the Amount of Professional Tax to be paid?

The maximum amount of PT to be paid per annum is INR 2,500. PT also depends on the type of profession and the monthly income of an individual.

How does (PT) Professional work?

The professional tax has its formula and slab rates which are set by the individual states and union territories. And the state government has the right to make it optional to impose PT in states. The Professional Tax is deducted from the employee’s monthly income, which is deducted by the employer of the organization and paid to the State government. And the tax is collected by the commercial tax department of the particular states.

How to fill the application form of Professional Tax (PT)?

To file the PT return or fill the application form you have to follow the procedure –

1. Go to the official website of the states. https://mahagst.gov. http://pt.kar.nic.in
2. Under the e-Service, click on the option of ‘enrolment application’ then a new window will open.
3. On that window you will get two options ‘enrolled’ and ‘new’, if you are new then click on ‘new’.
4. Then,under the basic details, enter all your details, such as – business status, financial year, PT office, return type and class of person.
5. After, click on next, you will get another window, where you have to mention other essential details.
6. Then, click on next, where you will get the option for payment, where you can make the payment via net banking, debit or credit card.
7. Once you make your payment you can download your receipt.

Professional tax (PT) is applicable for?

It is applicable for both individuals and entities –

• Hindu Undivided family (HUF)
• Associations
• Society
• Management consultant
• Club
• Corporations
• Companies
• Chartered accountant
• Contractor
• CS
• Legal practitioner
• Firms
• LLP
• Insurance agents
• Tax consultant
• Medical practitioner such as – doctor
• Engineers
• Architectures, and
• Others.

Who all are exempted from Professional Tax?

1. 1. Charitable hospitals and philanthropic institutions which are present in places that come under the taluka level.
   2. Ex-servicemen who come under the scheduled 1.
   3. A handicapped person who has a 40% disability. But relevant certificates must be submitted.
   4. An individual who has permission for a single taxi to carry goods or a three-wheeler.
   5. For individuals who are blind, dumb and deaf and earning a salary.
   6. For individuals who have only one child and have undergone a sterilization operation, However, the relevant documents should be submitted.
   7. The foreign technicians who have been employed by the state.
   8. An individual who runs educational institutions and teaches classes up to 12th standards.
   9. Who all are in the Central Paramilitary Force (CPF).
   10. Those persons who all come under the armed forces. Combatant and Non-Combatant.
   11. Badli workers in textile workers.
   12. Individuals who are above 65 years of age.
   13. Parents with children who all are suffering from mental disabilities or any other disablities.
   14. Women working as agents under Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings.
   15. Individuals with permanent disabilities mentally or physically.

FAQs

Is professional tax applicable for freelancers?

Yes, it applies to freelancers. If freelancers are earning more than the prescribed limit in the states, then they will be liable to pay the professional tax.

Why are professional taxes different for all states and union territories?

Because the state government levies a professional tax, and the state government has its own PT slab rate, which is different for all states.

What will be the penalty if I miss paying the Professional Tax?

If you miss paying the PT, then you have to pay the penalties of 1.25% per month within a deadline.

If I face some queries, where can I resolve my queries?

If you have any queries, please visit the website for the respective state and contact the department via chat or call the number given.

Karnataka PT, Maharashtra PT, Gujarat, Tamil Nadu, Andhra Pradesh 

We hope that this post was able to answer your questions about PT.

Any more questions? Let us know in the comment section below.