Professional tax is the tax that is levied by the State governments. It is paid by salaried individuals or anyone in a profession like chartered accountant, doctor, lawyer, etc. but in some states; it is applicable only to certain specified professions. Professional tax is just like the income tax but income tax is collected by the Central Government while professional tax is collected by the State Government. Professional tax is imposed at the state level; it tends to differ from one state to another. It is a mandatory to pay professional tax due to source of revenue for the government. However, not all states and union territories impose this tax. Some examples of the state governments which impose professional tax are Karnataka, Maharashtra, West Bengal, Meghalaya, Orissa, Tripura, Tamil Nadu, Gujarat, Assam and Kerala.
It is deduced from the salaries of the employees by the owner of the business on every month and pay the same amount to the prescribed authority. On other hand, professionals need to get a registration themselves in the prescribed form with prescribed department. To making the process of professional tax hassle free, many states like Gujarat, West Bengal, Orissa and Madhya Pradesh are providing the facility of online payment of professional tax. Failure to obtain professional tax registration leads to fines and penalties.
