The states which impose professional tax are Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, Jharkhand and Sikkim, Mizoram.
Business owners, working individuals, merchants and people carrying out various occupations come under the purview of this tax.
The maximum amount payable per year is INR 2,500 and in line with tax payer's salary, there are predetermined slabs.
Every person engaged in any profession, trade, calling or employment and falling under one or the other of the classes mentioned in the second column of the Schedule shall be liable to pay to the State Government tax at the rate mentioned against the class of such persons in the third column of the said Schedule.
For example in state of West Bengal, owner of a factory has to pay professional tax only if the preceding year turnover is greater than 5 lac rupees and in case of companies there is a mandatory payment of rupees 2,500 /- each year as professional tax irrespective of turnover.
The commercial tax department of the respective states collects it which ultimately reaches the fund of municipality corporation.
Person responsible to pay professional tax In case of employees, an employer is the responsible to deduct and pay professional tax to the State Government subject to monetary threshold if any provided by respective State’s legislation.
Additionally, employer (corporates, partnership firms, sole proprietorship etc) also being a person carrying on trade/profession is also required to pay professional tax on his trade/profession again subject to monetary threshold if any provided by respective State’s legislation.
Persons who are carrying on freelancing business without any employees also required to register themselves subject to monetary threshold if any provided by respective State’s legislation.