Professional Tax
PT or a Professional tax is a direct tax that applies to all individuals who earns income from employment, practicing their trading or professions such as doctors, lawyers, teacher, CA, etc. PT is deducted from the individual’s monthly salary and is deposited to the state government. Professionals also pay it directly to the government.
As per the Income Tax Act, 1961, such professionals can claim a tax deduction for the PT paid during the financial year.
The PT calculation and the amount collected may differ from one state to another, but it has a limit of Rs.2500 per annum.
Applicability
Professional tax is not applicable in the states mentioned below
| Andaman and Nicobar Islands | Arunachal Pradesh | Chandigarh | Dadra and Nagar Haveli |
| Daman and Diu | Delhi | Goa | Haryana |
| Himachal Pradesh | Ladakh | Lakshadweep | Rajasthan |
| Uttaranchal | Uttar Pradesh |
Tax Slab
Exemption
There are exemptions provided for specific individuals to pay Professional Tax under the Professional Tax Rules. The following individuals are exempt from paying professional tax:
- Parents of children with permanent disability or mental disability.
- Members of the forces as defined in the Army Act 1950, the Air Force Act 1950, and the Navy Act 1957, including members of auxiliary forces or reservists serving in the state.
- Badli workers in the textile industry.
- An individual suffering from a permanent physical disability (including blindness).
- Women exclusively engaged as an agent under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings.
- Parents or guardians of individuals who have a mental disability.
- Individuals above 65 years of age.
- Even for “persons” who are non-exempt, most do not have to pay professional tax if their income is below a certain threshold.
The above is a broad list of exemptions. Please refer to the rules for the individual states below for specific information related to your state.
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