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Professional Tax – What is?, Applicability, Due Dates, Slabs, Interest on Non Payment on of Professional Tax, Article 276. Professional Tax is the tax by the state governments in India. Anyone earning an income from salary or anyone practicing 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. However, not all states impose this tax. The states which impose professional tax are Karnataka, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat,Assam, Chhattisgarh, Kerala, Meghalaya, Odisha, Tri pura, Madhya Pradesh, andSikkim. Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax. Find Complete Details related to Professional Tax like – What is Professional Tax?, Article 276 in Constitution of India 1949, Deduction U/s 16 of Income Tax Act, Professional tax Rates, Professional Tax Forms, Professional Tax In India And Professional Tax Slab Rate etc. We also try to provide Professional Tax Slab Rates for AY 2016-17 for All States. Now you can scroll down below and check everything you want to know about Professional Tax.
What is Professional Tax ?
- Professional tax is levied by state government on the income earned by the way of profession, trade, calling or employment
- The power to levy professional tax has been given to the states by way of clause (2) of Article 276 of the constitution of India.
Professional Tax is exacted by specific Municipal Corporations and lion’s share of the Indian states force this obligation. It is a wellspring of income for the legislature. The greatest sum payable every year is INR 2,500 and in accordance with citizen’s compensation, there are foreordained sections. It is likewise payable by individuals from staff utilized in privately owned businesses. It is found by the business consistently and sent to the Municipal Corporation. It is an obligatory to pay proficient duty. The citizen is qualified for money assess reasoning for this installment.
Professional Tax Brief Telangana & Andhra Pradesh
Applicability of Professional Tax
Applicability of Professional Tax according to the Constitution of India: Article 276 of the Constitution of India gives that “there should be required and gathered an expense on callings, exchanges, purposes for living and vocations, as per the arrangements of this Act. Each individual occupied with any calling, exchange, calling or work and falling under either of the classes specified in the second section of the Schedule should be at risk to pay to the State Government impose at the rate said against the class of such people in the third segment of the said Schedule. Given that passage 23 in the Schedule should apply just to such classes of people as might be determined by the State Government by notice every once in a while.
Article 276 in Constitution of India,1949
Despite anything in Article 246, no law of the Legislature of a State identifying with charges for the advantage of the State or of a region, region board, neighborhood board or other nearby specialist in that in regard of callings, exchanges, reasons for living or livelihoods might be invalid on the ground that it identifies with a duty on pay
The aggregate sum payable in regard of any one individual to the State or to any one region, region board, nearby board or other neighborhood specialist in the State byway of duties on callings, exchanges, purposes for living and occupations should not surpass two hundred and fifty rupees for each annum: Provided that if in the money related year quickly going before the initiation of this Constitution there was in drive on account of any State or any such district, board or expert an expense on callings, exchanges, reasons for living or jobs the rate, or the greatest rate, of which surpass two hundred and fifty rupees for every annum, such assessment may keep on being exacted until the point when arrangements despite what might be expected is made by Parliament by law, and any law so made by Parliament might be made either by and large or in connection to any predetermined States, regions, sheets or specialists
The energy of the Legislature of a State to influence laws as previously mentioned as for to charges on callings, exchanges, purposes for living and jobs might not be interpreted as restricting at all the energy of Parliament to influence laws as for to charges on pay collecting from or emerging out of callings, exchanges, reasons for living and livelihoods
Derivation U/s 16 of Income Tax Act
- Any sum paid to state government as expert duty is permitted as reasoning under area 16(iii) of Income charge Act.
- Segment 16(iii):-
- Derivation is accessible just in the year in which proficient expense is paid.
- In the event that expert expense is paid by boss in the interest of representative, at that point first it is incorporated into the pay of the worker as a “Perquisite” and afterward the same is permitted as reasoning by virtue of “Proficient Tax” from net compensation.
- There is no money related roof under Income assess Act(under the Article 276, State government can’t force more than Rs 2500 Per annum as expert tax).Whatever proficient duty is paid amid the year is deductible.
Deducted and Paid By?
- If there should arise an occurrence of salaried and breadwinners, the expert expense is at risk to be deducted by the business from the pay/compensation and the same is to be stored to the state government.
- If there should arise an occurrence of different class of people, this expense is obligated to be paid by the worker himself.
Professional tax Rates
- If you are salaried employee earning above Rs.12000 per month then you are liable to pay Rs.200 per month. The Annual Professional Tax is Max Rs.2500.
- Please Note these Professional Tax Rates is Only as per Gujarat State (We Provide Professional Tax Slab Rates for All States in Next Article
Monthly Salary or Wages Tax Rates Up to Rs 5999 Nil Rs 6000 to 8999 Rs 80 Per Month Rs 9000 to 11999 Rs 150 Per Month Rs 12000 and Above RS 200 Per Month
Registration of Professional Tax
- The Employer needs to get enlisted regardless of whether he is dependable to deduct assess from the compensation of one worker.
- Frame No 1 is the Application shape for Registration.
- As far as possible for enlistment is 60 days from the date of accumulating risk under the Act.
- The Employer needs to get separate enlistment for each of his Branch
Deposit of Amount Deducted
- Managers secured under the locale of “State Government” as Designated specialist should pay in the treasury by Challan through the bank. Different businesses should pay at the place of installment announced by the Designated Authorities concerned.
- On the off chance that a business has utilized more than 20 workers, he is required to make installment inside 15 days from the finish of the month. Notwithstanding, if a business has under 20 representatives, he is required to pay quarterly(i.e. by the fifteenth of one month from now from the finish of the quarter).
- Neglects to get Registration – He will be obligated to a punishment of Rs.20/ – every day under Section 5(5) for the period amid which he stays unregistered.
- Enthusiasm on Late Payment of Professional Tax – He is at risk to pay enthusiasm at the rate of 18 % per annum for such postponed period alongside punishments recommended
- Non Deposition of Amount. – The authorities have energy to recuperate such sum alongside material punishment and enthusiasm from the advantages of such defaulter. In addition they can connect his financial balance too. In genuine cases, indictment case (police case) likewise can be documented.
Due Date for Payment of Professional Tax
If less than 20 or less 20 Employees , than Due date for payment of Professional Tax is 15th day from the end of quarter
Due Date For Payment Of Professional Tax
April-June 15th of July July – Sep 15th of October Oct-Dec 15th of January Jan-March 15th of March
If More than 20 Employees , than Due date for payment of Professional Tax is 15th day from the end of Month
Month Due Date For Payment of Professional Tax April 15th of May May 15th of June June 15th of July July 15th of August August 15th of September September 15th of Oactober October 15th of November November 15th of December December 15th of January January 15th of February February 15th of March March 15th of April
As Per Gujarat State
- A monthly return in Form No.5 is to be filed by 15th of next month, if the number of employees is more than twenty. Where number of employee is less than 20, only an annual return in Form No.5AA is required to be filed.
- If Any Registration holder wants to file Annual return then he can file if he has obtain special permission from the authority by applying in the FORM 5B for this purpose.
Professional Tax Forms (Gujarat Commercial Tax)
Form name Description Form 1 Employer’s Registration Form Form 3 Application For a Certificate Of Enrolment / Revision Of Certificate Of Enrolment Form 4-A Declaration To Be Furnished By An Employee To His Employer or Employers Form 5 Return Of Tax Payable By Employer Form 5-A Return Of Tax Payable By An Employer Form 5-AA Return Of Tax Payable By An Employer Form 5-B Application For Permission To Furnish Annual Return Form 5-C Application For Grant Permission To File Consolidated Return Form 5-CC Application For Grant Permission To File Consolidated Return