Professional Tax in Punjab Professional Tax in Punjab

Around 17 states collect professional tax in India. Professional tax is not collected in union territories. The state government collects it from individuals who earn through professional work, trade, labor, self-employment, and large and small-scale business professionals. The collection and tax range vary depending on state rules and norms, but the central government puts a maximum professional tax value of Rs.2500/- per year. The maximum professional tax value is standard for all states that collect it. Let’s see how professional tax in Punjab is collected, the eligibility criteria, and the tax range in this article.

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Punjab Professional Tax Act

India has a well-defined salary structure and an income tax system for each individual who generates revenue. Likewise, some states in India have a professional tax system. The professional tax system in Punjab works under the Punjab State Development Tax Act of 2018. The experience tax is a prime resource that generates significant revenue for the Punjab state government. The professional tax is used for the public’s welfare, hospital development, educational schemes, scholarships, and other benefits. The Indian constitution has rules and regulations in Article 276, where Clause 2 covers professional tax regulations.

Applicability of Professional Tax in Punjab

The person who earns income in Punjab through self-employment, small and large-scale business, trading, government work, freelancers, or any private sector can pay professional tax to the Punjab state government. The Punjab government’s eligibility list is different from that of other states. The below-mentioned categories of individuals apply to professional tax.

  1. Individuals who generate income from Punjab government revenues and who may work inside or outside the state are supposed to pay the tax.
  2. Individuals working in an organization or company owned or managed by the Punjab state government must pay the tax.
  3. The residents of Punjab earn income from the railway department of any state or central government in India.
  4. Individuals working in an organization or company located within the boundary of Punjab that is corporate or incorporated with the state government have to pay the tax.
  5. Employers should be responsible for Individuals who fall outside the categories mentioned above.

When Should Professional Tax Be Paid in Punjab State?

The state, which collects professional tax from individuals earning in the state, proposes a stipulated due date for tax payment. Not all states have the same due period; it varies according to state norms. Punjab state government addressed the due date as June 30 every year for individuals who enroll before May 31. In addition, individuals who enrolled for professional tax after May 31 must pay the tax within one month. Earning individuals should be aware of their tax payment date.

Professional Tax Slab Rate in Punjab State

All tax-collecting states have separate tax slabs, but they do not exceed Rs. 2500/—per the central government norms. Go through the table below to know the professional tax rate in Punjab.

Sr No. The salary range of an individual Payable professional tax amount
1 Up to ₹7,500 Nil
2 Between ₹7,501 to ₹10,000 ₹175 per month
3 Above ₹10,000 ₹2,500 per annum
₹200 per month except for February
₹300 for February
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Punjab Professional Tax Online Payment

The professional tax has been paid on behalf of the employees by the employer from the salary of the employees; the employer can access the Punjab State Development Tax Portal and can log in with your username and password. After that, the employer has to enter the required details, such as the number of employees, date, year, and month of tax payment, under the challan section of the page. Now, the employer can pay the amount on behalf of their employees. You can pay by registering with the official website if you are self-employed. Then, you can create a username and password for your further online professional tax payment.

Due Date for Filing Punjab Professional Tax Returns

The due date is the same for everyone, regardless of their enrollment date. The eligible individuals must pay the tax on or before June 30th of every year. The period for paying the professional tax varies based on the individual’s enrollment date. If they enrolled before May 31st, the individuals have more time duration. If they enroll after May 31st, they must pay the professional tax within one month.

Who Is Exempt From Paying Professional Tax in Punjab?

Unlike other states, Punjab only gives 3 exemptions from paying the tax. Those are mentioned below.

  1. People who are fully engaged in agriculture and generate revenue from it.
  2. People who rarely earn from any source without any fixed base amount or period.
  3. Senior citizens of Punjab.

Late Payment Penalty of Professional Tax in Punjab

Punjab State Development collects penalties on people who do not make professional tax payments on the due date. The penalty is standard for all late payments. It is about 2% of the individual’s monthly taxable amount for the months they fail to pay the professional tax.

Conclusion

Professional tax applies to many states in India. In Punjab, individuals earning more than Rs 7500 per month are required to pay professional tax. The state government should collect at most Rs.2500 per year from an individual. Whoever does not pay the tax for an extended period and pays after the stipulated due period is levied a penalty according to their payable tax amount with the actual tax. Being an earning individual, everyone should take responsibility for paying the professional tax as it, in turn, returns to the public in welfare schemes from the Punjab state government.

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Frequently Asked Questions

Who Is Eligible to Pay Professional Tax in Punjab?

The state government of Punjab levies Professional Tax on individuals who earn more than Rs. 7.501/—per month. Self-employed individuals, salaried employees, and business professionals who earn an eligible monthly income must pay Professional Tax in Punjab.

Does Punjab Have a Penalty for Non-payment of Professional Tax?

All payments and taxes are penalized if working individuals fail to pay professional taxes or do not pay for the long term. They are subject to paying 2% of their stipulated tax payable amount, with the actual tax for how many months they have not paid it.

What Are the Documents Required for Professional Tax Registration in Punjab?

  1. Self-attested photocopy of PAN Card
  2. Partnership Deed, Certificate of Incorporation, MOA & AOA
  3. Proof of residence of the Partners, Directors, and Proprietors, such as Passport, Driving Licence, Voter Card, Aadhar Card, and Electricity Bill.
  4. Electricity Bill, Property Card, Agreement of Builder, Leave and License Agreement or NOC letter, and Rent Receipt.
  5. Canceled Cheque
  6. Establishment Certificate

How Much Is the Professional Tax in Punjab?

As we know, the maximum professional tax limit for the states that levy professional tax is Rs.2,500/-. The minimum taxable amount for professional tax is Rs.175/—for individuals with monthly incomes between Rs. 7,501/—and Rs. 10,000/-. The experienced tax varies according to the monthly income mentioned in the state’s professional tax slab.

Does an Employee Need to Register for Professional Tax in Punjab?

No, an employee is not required to register for professional tax. Their employer takes it over. They are required to register for the professional tax to deduct tax from their employees’ salaries and have to pay the government on behalf of their employees.

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