Professional Tax in India

Profession tax is a tax levied by the State Government on salaried individuals, working in government or non-government entities, or in practice of any profession, including Chartered Accountants, Doctors, Lawyers. Enginneers, consultants, artists etc or carry out some form of business. However, the maximum Profession Tax that may be levied by any State has been capped at Rs 2500/-. The total amount of profession tax paid during the year is allowed as Deduction under the Income Tax Act. For Employees, Profession Tax is deducted by the employers from the salary of the salaried employees and same is deposited with the State Government.