[30 Min Live Discussion with Experts] on ‘Professional Tax in India’; 3:30 to 4:00PM, September 23rd, 2022

What is Monetary threshold?

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As mentioned in my earlier response, it varies from state to state because it is a state-imposed tax. Professional tax is deducted according to the slabs established by each state and union territory. Also, the upper limit has been set to INR 2,500 per annum per individual.

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Who is responsible for deducting Professional Tax?

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The employer is responsible for registering, deducting, and paying the professional tax to the government regularly for employees and wage earners.

In case of self-employed professionals, the individuals are personally responsible for paying their professional tax. They will first need to enrol and obtain a Certificate of Enrolment from the tax department.

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What is the penalty of violation of Professional Tax regulation?

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Fails to Get Registration: The person or company will be liable to a penalty for the period during which it remains unregistered.

Fails to Deposit to the Government/ Late Deposition: Will be liable to a penalty for the delay duration.

Non-Deposition of Amount: The officials have the power to recover such amount along with applicable penalty and interest from the assets of such defaulter. Moreover, they can even attach the bank account also. In severe cases, defaulters can be prosecuted.

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Please guide about professional tax in Bihar

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Please find below the slab rates for Professional tax in Bihar:

Salary and wage earners whose monthly salaries or wages in INR per annum. Tax Rate in INR per annum
Up to 3,00,000 – Nil
From 3,00,001 to 5,00,000 – 1,000
From 5,00,001 to 10,00,000 – 2,000
Above 10,00,000 – 2,500

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Who is exempted from paying Professional Tax?

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Broadly, the following individuals are exempt from paying professional tax:

• Parents of children with permanent disability or mental disability.
• Members of the forces as defined in the Army Act 1950, the Air Force Act 1950, and the Navy Act 1957, including members of auxiliary forces or reservists serving in the state.
• Badli workers in the textile industry.
• An individual suffering from a permanent physical disability (including blindness).
• Women exclusively engaged as an agent under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings.
• Individuals above 65 years of age.

Even for “persons” who are non-exempt, most do not have to pay professional tax if their income is below a certain threshold.

Please also note that the exemption may also vary from state to state.

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Can we claim Professional Tax in ITR?

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The deduction for Professional Tax paid is allowed under Section 16(iii) of the Income Tax Act, 1961.

An employee can claim the deduction of Professional Tax deducted from their salary and deposited to authorities by employer while filing the tax return.

The tax paid by the employer on behalf of the employee (without deduction from salary) is also eligible for deduction. Here, the amount paid by the employer as the professional tax will be first included as perquisite in the total salary. Later the equal amount will be allowed as a deduction under Section 16(iii) of the Income Tax Act, 1961.

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Thank you so much Mr. Shubham Goel ( especially extending to address so many user queries after the scheduled session time) You are awesome!

It was very insightful, informative and knowledgeable for all. It was indeed a great session of abundance of knowledge on Professional Tax in India. Thank you for creating an amazing experience for our members.

Community members, in case there are any unanswered questions, please post it in the thread or in the community directly, our experts will guide you with your doubts.

We are thankful to each and everyone who attended, liked and viewed the session.

So, we are now coming to a close to this edition of LIVE discussion with the expert on the greytHR community. This thread will always be available for reference.

Closing now. See you in the next LIVE soon!

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Thanks Kaulin for your kind words. It was a nice and interactive session.

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Thanks sir for giving your time. We would be eager to have you soon for another greytribelive session.

Community Manager.

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Is it possible to share any notification of the restricted amount. We have mentioned that Rs 2500 is maximum limit employee can avail during the year ( including previous employer deducted PT) Currently he is working in Karnataka.

Also please let us know this LTC scheme is available for FY 2022-23

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Hey @deepa1

Thanks for sharing your query.

We have informed Mr. Shubham about your question. Will share the response soon.

Regards,

Community Manager.

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Hi Deepa,

The Article 276 in the Constitution of India, 1949, provides the following:

“The total amount payable in respect of any one person to the State or to any one municipality, district board, local board or other local authority in the State byway of taxes on professions, trades, callings and employments shall not exceed Rs. 2,500 per annum.”

Further, the LTC scheme was valid upto 31 March 2021. Hence, the same is not available for FY 2022-23.

Regards,

Shubham Goel

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Hi Deepa,

The Article 276 in the Constitution of India, 1949, provides the following:

“The total amount payable in respect of any one person to the State or to any one municipality, district board, local board or other local authority in the State byway of taxes on professions, trades, callings and employments shall not exceed Rs. 2,500 per annum.”

Further, the LTC scheme was valid upto 31 March 2021. Hence, the same is not available for FY 2022-23.

Regards,

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