Professional tax is a state levy on income from employment, deducted by the employer and paid to the state. Employers need two things: an enrolment certificate to pay tax on their own trade, and a registration certificate to deduct and deposit tax for employees. It applies only in states that levy it.
Professional tax is charged only by certain states. Confirm whether the state where your employees work levies it and what its slab is before deducting anything.
The employer applies for a Professional Tax Enrolment Certificate to pay professional tax on its own business or profession.
Separately, apply for a Professional Tax Registration Certificate, which authorises you to deduct professional tax from employees' salaries and deposit it.
Deduct professional tax from each employee's salary according to the state's monthly slab, which is capped at Rs 2,500 a year by the Constitution.
Deposit the deducted tax and file returns by the state's due dates, monthly or annually depending on the state.
Professional tax is capped at Rs 2,500 per person per year across all states, though the monthly slabs differ.
No. Professional tax is levied only by some states. Others, including several in north India, do not charge it.
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