The tax on income levied by the state government on individuals is called Professional tax. Whether you are a professional, employee or trader, all are required to pay professional tax as per the specified threshold by the state government. In India, not all states levy professional tax and the tax slab or limits also varies with each state.

Although as per Article 246 of the Indian Constitution, the taxes on income can be levied or make laws in its respect comes only within the power of Parliament. However, professional tax is one such tax on income which is collected by the state government. The State Government can also make laws regarding professional tax. The maximum limit for professional tax has been set at ₹ 2,500 per year for an individual. While calculating income tax, the professional tax shall be deducted from the total taxable income.

Applicability and tax amount in professional tax.

1.    Persons in employment

 

Conditions	Amount of Tax
a)    Whose annual salary or wages does not exceed ₹ 2,25,000	Nil
b)    Whose annual salary or wages exceeds ₹ 2,25,000 but does not exceed ₹ 3,00,000	₹ 1500 (₹ 125 per month)
c)    Whose annual salary or wages exceeds ₹ 3,00,000 but does not exceed ₹ 4,00,000	₹ 2000 (₹ 166 per month for eleven months and ₹ 174 for twelfth month)
d)    Whose annual salary or wages exceeds ₹ 4,00,000	₹ 2500 (₹ 208 per month for eleven months and ₹ 212 for twelfth month)

 

2.    Dealer registered under the Madhya Pradesh Vat Act, 2002 and/or person registered under the Madhya Pradesh Goods and Services Tax Act, 2017.

 

Conditions	Amount of Tax
a)    Whose annual turnover does not exceed ₹ 40 Lacs	Nil
b)    Whose annual turnover exceed ₹ 40 Lacs	₹ 2500

 

3.    A dealer or person engaged in the sale or supply of goods or service but not registered either under the Madhya Pradesh Vat Act, 2002 or the Madhya Pradesh Goods and Services Tax Act, 2017.

 

Conditions	Amount of Tax
a)    Whose annual gross turnover or receipt does not exceed ₹ 40 Lacs	Nil
b)    Whose annual gross turnover or receipt exceed ₹ 40 Lacs	₹ 2500

 

DISCLAIMER: The views expressed are strictly of the author. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.