Professional Tax Act 1975

Professional Tax is a direct tax which is levied on persons earning an income by way of either practicing a profession, employment, calling or trade. Unlike income tax which is levied by the Central Government, Professional tax is levied by the government of a state or union territory in India.

As this Tax is a state subject, the rate of Professional tax varies from one state to another. While some states might charge it as a percentage value, other states tend to charge it as a fixed amount based on income slabs. The calculation is based on predetermined slabs and on the basis of the salary or monthly income levels. Any employer with a 'Certificate of Registration' can be penalized by the Government if this tax is not paid.