Is professional tax mandatory?

To be honest, when I first heard about ‘Professional tax’, I assumed that it is a tax levied on professionals. But this is not what it means. I know there can be people like me who can get confused because of the name ‘Professional tax’. I will tell you what a professional tax is and is professional tax compulsory or not.

Professional tax is a tax that is levied on every kind of profession, employment, or trade. It is levied on the basis of the income that is earned on that particular employment, profession or trade. It is usually levied on employees in a profession, on a person who is carrying out a business which also includes, freelancers and other employees, which is subject to the earning exceeding the monetary limit.

Is it compulsory to obtain professional tax?

It is compulsory to obtain professional tax, but this is subject to the rules and regulations of different states. According to Article 246 of the Constitution of India, it is the Parliament that holds the ultimate power to make rules and laws with respect to the Union List which includes taxes on income. So, eventually, the power to make rules with respect to concurrent and state lists is only exclusive to the state. 

In simple words, if I tell you if professional tax is mandatory or not, I would say that since professional tax is a tax that is levied by the state government, it is based on the laws of every state if they choose to levy professional tax or not. 

Let me tell you which states and union territories levy professional tax and which don’t.

States  and Union Territories where Professional tax is applicable:

• Andhra Pradesh

• Karnataka

• Maharashtra

• Tamil Nadu

• Assam

• Kerala

• Meghalaya

• Tripura

• Bihar

• Jharkhand

• Madhya Pradesh

• West Bengal

• Manipur

• Mizoram

• Odisha

• Puducherry

• Sikkim

• Telangana

• Nagaland*

• Chhattisgarh

• Gujarat

States and Union Territories where professional tax is not applicable:

• Arunachal Pradesh

• Himachal Pradesh

• Delhi

• Haryana

• Uttar Pradesh

• Uttarakhand

• Andaman and Nicobar Islands

• Daman & Diu

• Dadra and Nagar Haveli

• Lakshadweep

• Jammu & Kashmir

• Punjab

• Rajasthan

• Chandigarh

• Goa

So, you have the answer to your question, ‘

Is professional tax compulsory?’

Professional tax is a type of tax deducted from an employee by the employer. This tax is levied by many state governments in India and the professional tax levied differs from person to person depending on the salary they receive and the charges levied by every state. So, to answer the question ‘is professional tax mandatory?’ the answer would be yes! Generally, a small amount of money is deducted from your salary as p.tax. This is the professional tax which is deducted by the employer. For example, in West Bengal, if you earn Rs. 10,000 every month working in a private firm, you will receive Rs. 9,800. Rs. 200 will be deducted from your salary as professional tax. 

Is professional tax registration mandatory for GST registration?

Yes, since professional tax is a state tax you need to pay for it. The tax slab rates differ from state to state. So, before paying the professional tax you should check with your employer. For a better understanding, I will share the professional tax slab rates of some states.

Professional Tax in Telangana

Professional Tax in Kerala

Professional Tax in West Bengal

Professional Tax in Maharashtra

Professional Tax in Karnataka

Professional Tax in Andhra Pradesh

Professional Tax in Tamil Nadu

This was all about ‘is professional tax mandatory’ in a nutshell.

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