Question
I keep seeing a professional tax deduction on my salary slip. What exactly is it and who is liable to pay it?
Answer
Professional tax is a state-level tax on income earned from any employment, trade, profession or calling, not a tax only on professionals. It is levied under Article 276 of the Constitution by individual state governments, so rules and amounts differ from state to state. Salaried employees have it deducted by their employer, while self-employed people, freelancers, professionals and businesses pay it directly. Only certain states levy it; many charge nothing. The maximum anyone pays is Rs 2,500 per year. Check your exact liability by state and salary with our professional tax calculator.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.