What is professional tax? How much will you pay in THESE states — EXPLAINED | Mint

In the last few weeks, some states have tweaked professional tax rules during budget presentations. The Assam government has announced the exemption of professional tax for those earning up to ₹15,000 for all the working people in the state. In contrast, the Karnataka government proposed amendments to professional tax rules, increasing it to ₹200 from ₹150 in February. Here’s a look at how professional tax works.

What is professional tax?

Professional tax is levied on people engaged in any type of profession or business based on income. The state government collects this tax on employees and businessmen, including freelancers and professionals, who earn over a certain income level.

It must be noted that not every state levies professional tax and makes rules accordingly. Hence, the tax rate is different in different states. However, Article 276 of the Consitution has provided a maximum cap of ₹2,500 to charge professional tax per person.

States-wise professional tax range

Andhra Pradesh: A professional tax of ₹150 is levied every month on income earners between ₹15,001 and ₹20,000. Those earning more than ₹20,000 will have to pay ₹200.

Bihar: The state government charges professional tax in the range of ₹1,000 to ₹2,500 for those earning above ₹3 lakh.

Chhattisgarh: A professional tax of ₹130 to ₹210 is levied on income above ₹1,00,000 annually.

Gujarat: For monthly income above ₹12,000, a professional tax of ₹200 is levied.

Jharkhand: The state levies professional tax in the range of ₹100 to ₹208 for individuals earning above ₹3 lakh a year.

Karnataka: Professional tax of ₹200 is charged on monthly income above ₹25,000.

Kerala: Professional tax is charged on half-yearly income above ₹12,000 in the range of ₹120 to ₹1,250.

Madhya Pradesh: For monthly income above ₹18,750, professional tax is levied from ₹125 to ₹212.

Assam: Professional tax is exempted up to ₹15,000 monthly income.

Maharashtra: Professional tax is levied on monthly income above ₹7,500 in the range of ₹175 to ₹300. A tax exemption is provided to women earning up to ₹10,000.

Manipur: For annual income above ₹50,000, professional tax is between ₹1,200 and ₹2,500.

Meghalaya: A professional tax ranging from ₹16.5 to ₹208 is levied on monthly incomes of ₹4,166 and more.

Mizoram: Professional tax is levied on monthly income over ₹5,000, ranging from ₹75 to ₹208.

Nagaland: For monthly income above ₹4,000, professional tax is charged from ₹35 to ₹208.

Odisha: Individuals earning more than ₹1,60,000 will be required to pay professional tax between ₹125 and ₹300 every month.

Puducherry: For a yearly salary above ₹1,00,000, a tax in the range of ₹250 to ₹1,250 is levied.

Punjab: A professional tax of ₹200 is charged to individuals earning more than ₹20,833 every month.

Sikkim: Tax is levied on monthly income above ₹20,000, ranging from ₹125 to ₹200.

Tamil Nadu: On monthly income above ₹21,000, professional tax is levied between ₹100 and ₹1,095.

Telangana: Professional tax of ₹150 is levied on those earning between ₹15,000 and ₹20,000, and ₹200 is charged on income above ₹20,000.

Tripura: Individuals earning between ₹7,500 and ₹15,000 every month will have to pay a professional tax of ₹150. Those earning more than ₹15,000 will have to pay ₹208.

West Bengal: For monthly income above ₹10,000, the professional tax will be in the range of ₹110 to ₹200.