What is professional tax?
Professional Tax is the tax charged by the state governments in India. Any one earning an income from salary or any one practising a profession such as chartered accountant, lawyer, doctor etc. are required to pay this professional tax. Different states have different rates and methods of collection. In India, professional tax is imposed at the state level.
Professional tax is levied by particular Municipal Corporations and majority of the Indian states impose this duty. It is a source of revenue for the government. The maximum amount payable per year is INR 2,500 and in line with tax payer's salary, there are predetermined slabs. It is also payable by members of staff employed in private companies. It is deduced by the employer every month and sent to the Municipal Corporation. It is a mandatory to pay professional tax. The tax payer is eligible for income tax deduction for this payment.