Yes, if you are a salaried individual, it is mandatory to pay professional tax.

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.

Since professional tax is a tax levied by the state government, it usually differs from one state to another. Each state has its own slab that it declares and the professional tax is deducted based on these slabs.

Professional Tax is deductible from income prior to calculation of Income Tax, and hence, appears at the top of the salary slip. It is deducted from the salary of the employee and deposited to the State Government by the employer.

As Union Territories are small regions of the country, they tend to generate lower revenue than states. Hence, professional tax is not applicable for employees working in a Union Territory.

The maximum amount of professional tax levied by a state is Rs. 2,500 which is allowed as a deduction from your salary.

There are some categories who are exempted from paying professional tax. These exemptions vary from State to State.

In the case of salaried employees who are liable to pay professional tax, the duty lies on the employer to get registered and deduct the professional tax from his employee’s salary and deposit the same into the State Governments account.
In the case of a self-employed individual who is covered under professional tax, it is his or her responsibility to get registered and pay professional tax in a correct and timely manner.

The categories of persons liable for Profession Tax are any individual, a Hindu Undivided Family, firm, company, corporation or other corporate body, any society, club or association.

An employer, who wishes to obtain Registration Certificate, has to apply for the same within thirty days of his becoming liable to pay tax.

The penalty prescribed as per section 5(6) for giving false information in application for Registration Certificate or Enrolment Certificate is equal to three times the tax payable under the Profession Tax Act.

Yes, there is a facility of making lump sum payments for Enrolment Certificate holder who is liable to pay tax at the rate of Rupees 2500 per annum.

The Enrolment Certificate holder can discharge his liability for the next five years by making payment in advance of a lump sum amount equal to four times of such rate of tax on or before 30th June, so advantage in paying lump sum is that of, saving of one year’s liability.

An employer liable to pay Profession Tax is assessed under Profession Tax Act.

Profession Tax shall be calculated at the rate mentioned in Schedule I at Sr. No. 1, on the basis of salary or wages earned per month by the employees and for others it shall be calculated at the rate mentioned in front of their corresponding entry in Schedule I.

If the exemption is claimed on account of self-physical disability OR physical or mental disability of a ward, it is necessary to submit medical certificate issued by a doctor working in the Government Hospital.