InvestorQ : Who levies professional tax?
Gaurav Patel made post

Who levies professional tax?

Arya Nanda answered.
3 years ago

Professional tax is one of the significant deductions one can see in his/her payslip. It is a tax that is levied on all kinds of professions, employments and traded and it is varies from profession to profession.

Professional tax is a deductible amount under Income Tax Act, 1961 and can be deducted from taxable income.

Professional tax is a type of tax that needs to be paid by each and every individual earning an income. The calculation of this tax and the professional tax levied differs from one state to another. However, the limit has been set to Rs. 2500 per year.

According to online portal cleartax, “as per Article 246 of Constitution of India, only Parliament has the exclusive power to make laws with respect to Union List which includes taxes on income. State has the power to make laws only with respect to Concurrent list and State list. However, professional tax is a kind of tax on income levied by state government. State government is also empowered to make laws with respect to professional tax though being tax on income under Article 276 of the Constitution of India which deals with tax on professions, trades, callings and employments.”