How to File a Professional Tax Return?

Many salaried employees will be very well aware of the phrase'professional tax' as it have been stated in the Form 16 / pay-slips issued to them. But some of them may or may not comprehend what it is and why is it mentioned in Therefore, this article is an effort to represent a better picture of what is'Professional tax' and how to file professional tax return. 

What is Professional tax and who levies it?

The classification of'Professional tax' could be one of those phrases which do not entirely convey the actual meaning. Nothing like the name suggests, professional tax is not just the tax levied on professionals but it is levied on all sort of professions, employments and It is imposed on a person carrying on business including, professionals, freelancers, etc. The amount of tax is subject to income exceeding the financial threshold if any.

As per the provisions stated under Article 246 of the Constitution of India, only Parliament has the elite power to make and amend laws with respect to Union List which taxes on earnings. The state has the authority to make laws only in regard with the Concurrent And State list. Though, professional tax is a kind of tax on earnings that is imposed by State Government (not all states government in India imposes professional tax). State Government also has the authority to make and amend laws regarding professional tax and professional tax return though it is a tax on income under Article 276 of the Indian Constitution.

What is the method to pay professional tax? 

Is any Professional Tax Return to be filed? This is yet again a State-specific inquiry. Though, generally, a professional tax may be paid either offline / online. Moreover, depending on the requirement of the state professional tax return also required to be filed at particular intervals.

Professional Tax Return Rate

Professional tax being imposed by the State Government is different from one state to other. Each state has its own laws, rules and regulations to administrate professional tax of that particular state. Though, all the states India have to follow the tax slab system based on the income to impose professional tax.

Additionally, Article 276 Of The Indian Constitution Which Gives Power To The State Government To Impose Professional Tax Also Has Offer For A Maximum Cap Of Rs 2,500 Further Than Professional Tax Can Not Be Charged On Any Individual.

Few Illustrative Professional Tax Slabs In The Country

• Professional tax slabs in Karnataka:

Monthly salary / wage up to Rs 15,000
--NIL Monthly salary / wage> Rs 15,000 -Rs 200 per month

• Professional tax slabs in Andhra Pradesh
Monthly salary / wage up to Rs 15,000
--NIL Monthly salary / wage between Rs 15,001 – Rs 20,000 --Rs 150 per month
Monthly salary / wage> Rs 20,000 --Rs 200 per month

Who is in charge to collect and pay Professional Tax?

Professional tax return is collected by the commercial tax department of the particular states. The collected tax eventually reaches the fund of Municipality Corporation.

Entity liable to pay professional tax

If an employee is paying professional tax than the employer is responsible to deduct tax from the salary and pay it to the State Government subject to the financial threshold if any prescribed by each State's legislation. In such case, the employer has to register and obtain both professional tax registration to be competent to pay professional tax on his / her profession / trade and professional tax enrolment certificate to be competent to deduct the tax from the salary of the employees and pay to the respective state government. Additionally, separate registration might be needed. .. for each office which depends on the respective State's legislation.
People who are indulged in freelancing business without any employees are also needed to register themselves subject to the financial threshold if any, prescribed by the respective State's legislation.
Still, a professional tax impose is subject to the exemption offered by the respective State to some categories For instance, parents or guardian of any individual who is suffering from any mental illness, blind persons are not liable among others from paying Professional tax.

Conclusion

Professional tax is not just the tax levied on professionals but it is levied on all sort of professions, employments and trades and it is levied based on the earnings of the respective profession, employments and trades., Professionals, freelancers, etc. on the requirement of the state professional tax return also required to be filed at particular intervals.