Professional Tax Act

The Professional Tax Act in India is a state-level legislation that imposes a tax on individuals earning an income through employment, profession, or trade. It is a mandatory tax applicable in certain states, and the rates and regulations are determined by the respective state governments. Employers are responsible for deducting professional tax from employees’ salaries and remitting it to the state government, while self-employed individuals must pay it directly. The tax slabs typically vary based on income levels, with a maximum annual cap of ₹2,500 as per the Constitution. Revenue collected through professional tax contributes to state development initiatives. The Act ensures compliance through penalties for late payment or non-payment, emphasizing its importance in state-level fiscal policy.