Professional Tax
Professional Tax
Professional Tax: a State tax on Businesses & Employees
Professional tax is collected by your State Government. It applicable to Employer and employees or working professionals like self-employed doctors, lawyers who are running own business.
There are two main professional tax
There are 2 main PT in India:-
- Employer PT (Tax on Businesses or Company): This tax applies to companies, businesses, firms and other entities who are registered under the GST. The amount of employer PT in Karnataka is Rs. 2,500. Additionally, separate PT registrations and payments are required for any branches, warehouses, or godowns. Partnership firms also have PT liability based on the number of partners.
- Employee PT (Tax on Salaried person): This tax is deducted from the salary of employees by their employers. The tax rate changes from state to state.
For Karnataka employees:
Karnataka Employee PT Update (Effective April 1, 2023):
As per the notification from Karnataka Act No. 14 of 2023, a new professional tax structure applies to salaried individuals in the state. Here’s the key takeaway:
- For employees with a monthly gross salary of Rs. 25,000 or more: A flat Rs. 200 is deducted as PT.
- For employees with a monthly gross salary below Rs. 25,000: No professional tax.
Need Help with Professional Tax?
- Email: team@teamindia.co.in
- Phone: 07019827351
Professional Tax Features
1. It Is A Judicial Requirements
2. To Avoid Paying Penalties
3. Easy To Comply
4. Deductions
5. The State Government Tax
Frequently Asked Questions
In India, Professional Tax is calculated on Salary slabs. Under minimum salary, there is no tax. The maximum amount paid as Professional Tax is Rs.2500 per year. The tax slabs differ from state to state.
Professional Tax appears at the top of the salary slip as it is deducted even before calculating income-tax. The employer deducts it from the salary of the employee and deposits it with the State Government.
Update – Karnataka based employees. As of April 1, 2023 (Reference no: Karnataka Act No. 14 of 2023), there’s a change in how much Professional Tax (PT) gets deducted from your salary. If your monthly gross salary is Rs. 25,000 or more, a flat Rs. 200 will be deducted as PT. This applies even at the starting point of Rs. 25,000, so anyone earning that amount or higher will contribute Rs. 200 towards PT. Remember, for salaries Rs 24,999 and below, PT remains zero.
