Professional Tax in India: A Complete Guide for Self-Employed & Businesses
Introduction to Professional Tax
Professional Tax (PT) is a state-imposed tax levied on individuals earning income through employment, profession, trade, or business. While it is applicable across various states in India, the rates, slabs, and exemptions differ from one state to another. Both salaried individuals and self-employed professionals are required to pay this tax.
Who Needs to Pay Professional Tax?
- Salaried Employees: Deducted by the employer and deposited with the state government.
- Self-Employed Individuals: Professionals like doctors, lawyers, chartered accountants, and freelancers must pay PT directly to the state government.
- Businesses & Traders: Business owners are liable for PT, depending on their annual turnover.
Professional Tax Slabs for Self-Employed & Businesses
Kerala
Self-Employed Individuals & Businesses: PT is based on annual income:
- Income up to ₹12,000: Nil
- ₹12,001 – ₹24,000: ₹120 per annum
- ₹24,001 – ₹60,000: ₹300 per annum
- ₹60,001 – ₹1,20,000: ₹600 per annum
- ₹1,20,001 – ₹2,40,000: ₹1,200 per annum
- ₹2,40,001 – ₹10,00,000: ₹2,500 per annum
Payment is due every six months.
How to Pay Professional Tax?
- Registration: Self-employed individuals and businesses must register with the state’s tax department.
- Filing & Payment: Payment can be made online or offline based on the respective state’s tax portal.
- Penalties for Non-Payment: States impose penalties for late payment, ranging from fines to interest on dues.
Conclusion
Professional Tax is an important compliance requirement for individuals and businesses operating in India. Understanding state-specific tax slabs and ensuring timely payments can help avoid penalties and legal issues. If you’re unsure about your PT obligations, consulting a tax professional is always recommended.
For further details on PT for other states or specific business categories, reach out to our experts at Tradeviser.
Tradeviser, an idea shaped into reality with the motive of helping new businesses and startups with professional guidance end-to-end business services. Ever since its inception since 2016, Team Tradeviser has worked diligently with over 200 startups and been part of their of their sedulous journey to make it to the big picture.
