Professional tax slab rate & payment in Gujarat

Professional tax is levied on employees or any person holding on the enterprise, including professionals, freelancers, etc. Under the provision by Article 276 of the Constitution of India, the professional tax slab in Gujarat is levied based on the monthly income of the professional by the State Government.

What is professional tax?

The ‘Professional tax’ is a tax on all trades, professions, and occupations and is imposed on the income earned. It is levied on employees or any person holding on the enterprise, including professionals, freelancers, etc. The professional tax is subject to income outshining the financial threshold, if any.

The State Government levies the professional tax on the income of the professionals. Therefore, the State Government can opt out from charging the professional tax. Article 276 of the Constitution authorizes the State Government to implement laws regarding professional tax; though it is an income tax, the Central Government usually monitors that.

How much professional tax is levied in Gujarat?

The professional tax slab in Gujarat is levied based on the monthly income of the professional:

  • Below Rs. 6000 - Nil
  • Rs. 6000 or more, but below Rs. 9000 - Rs. 80
  • Rs. 9000 or more, but below Rs. 12000 - Rs. 150
  • Rs. 12000 or more - Rs. 200

What are the professional tax rules in Gujarat?

Self-employed persons are liable to pay the professional tax themselves based on predetermined tax slabs that vary for each state and union territory. The tax is computed based on the annual taxable income of the individual. The professional tax can be paid either monthly or annually. Self-employed taxpayers must acquire a Certificate of Enrolment from the prescribed authority following the prescribed manner.

However, for the salaried individuals and wage earners, the employer deducts the professional tax every month from the employee’s salary following the professional tax slab. The employer is liable to deposit the same with the state government. The employer should register itself with the concerned authority to deduct the professional tax.

In the era of work from home, professional tax is levied based on location where the company has been registered.

The professional tax whether paid monthly or annually should not cross Rs. 2,500 on any person per financial year.

What is the professional tax exemption in Gujarat?

Usually, the employer should deposit the collected professional tax within 15 days from the previous month. An exception is allowed to the employer having less than 20 employees to deposit it quarterly. The collected tax amount can be deposited treasury by challan through the bank if they are covered under the state government's jurisdiction as a designated authority.

Through Sec. 26(A), in Gujarat budget 1999, the total professional tax exemption in Gujrat is allowed to the professionals above 65 years of age.

Are TDS and Professional Tax the same?

Tax Deduct at Source is like advanced tax. This is the amount deducted when payment is made, and salary is credited following a prescribed percentage established by the Income Tax Department.

Whereas the Professional Tax is collected at a fixed rate following the prescribed slab by the State Government calculated based on the employer's salary. 

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