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AN OVERVIEW
PROFESSIONAL TAX REGISTRATION
A professional tax is a tax that the government imposes on people who work in specific professions. Every state has different tax rates, often a percentage of an individual’s income. Lawyers, medical professionals, accountants, and engineers are a few occupations subject to professional tax.
Professional tax is typically taken from a worker’s pay by their employer and paid to the appropriate authorities. This lessens their burden of filing and paying their taxes separately and guarantees that they pay their taxes on time. The dual goals of professional taxes are to ensure that professionals pay their fair share toward national development and to bring in money for the government.
PAY PROFESSIONAL TAX
WHO MUST PAY PROFESSIONAL TAX?
The term “professional tax” refers to a tax imposed on those who work in certain professions, trades, or callings. This tax is imposed by the state governments in India and is owed by both salaried workers and independent contractors.
Professional tax is generally due to everyone who makes money through a profession or trade. This comprises professionals, including actors, musicians, doctors, lawyers, chartered accountants, engineers, and others. There are, however, some exceptions for some professional groups, including women and senior citizens.
CALCULATION
HOW IS PROFESSIONAL TAX CALCULATED?
All professionals in India who earn INR 1.5 lakh or more a year are subject to a 2% professional tax. Different rates apply to different categories of professionals in some states, though.
PAYING PROFESSIONAL TAX IN INDIA
HOW IS IT BENEFICIAL TO PAYING PROFESSIONAL TAX IN INDIA?
- Self-employment tax takes the form of professional tax. This means that your professional tax payment is subtracted from the income tax you owe.
- You may take advantage of specific deductions and exemptions under the Income Tax Act by paying professional tax.
- Since professional tax is a state-level tax, the state government is responsible for collecting it. This indicates that the funds raised through professional taxes are used to advance the state where you reside.
TAX REGISTRATION
EXEMPTIONS
According to the Professional Tax Rules, some people are excluded from paying Professional taxes.
These people are free from paying professional taxes:
- Parents of children who have mental or permanent disabilities.
- Persons older than 65 years.
- Employees of the textile sector who are Badli.
- Those serving in the state who are members of the services as defined by the Army Act of 1950, the Air Force Act of 1950, and the Navy Act of 1957, including auxiliary forces or reservists.
- Individuals with a physical impairment that cannot be overcome (including blindness).
- Under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings, agents are only women.
- Parents or guardians of people with mental disabilities.
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