Professional-Tax-in-Hyderabad-State-of-Telangana

Professional Tax in Hyderabad, Telangana

Professional tax is a direct tax levied by the State Government on all kinds of professions, trades and employment in proportion to the income of the individual. Article 276, Clause 2 of the Indian Constitution covers the provision concerning professional tax in the country. Professional tax is imposed by state governments on the individuals who are employed in governmental, private and non-governmental organizations. The quantum of levy varies according to the strata of income.

Who Pays Professional Tax in Hyderabad or the State of Telangana?

As per the Telangana Profession Tax Act, 1987, the Commercial Taxes Department regulated by the Telangana government is entrusted with the responsibility for collection of the profession tax due in the state.

Salaried Individuals: The employers are entrusted with the responsibility of paying the profession tax on employees’ behalf after deducting it from their salary. The employees can claim for the income tax deduction on the profession tax under Section 16(iii) of the Income Tax Act, 1961.

Self-Employed: Though the same slab rate is applicable for the self-employed individuals, they need to self-deposit the profession tax. Further, they can not claim it for the tax deduction in their income tax returns.

Categories of individuals that can claim exemption from paying professional tax:

  • An employee who has been employed for less than 120 days.

  • Senior citizens who have completed 65 years of age,

  • Parent of a mentally challenged child,
  • Persons or parents of children suffering from physical disability,
  • Physically handicapped persons with 40 % or more disability and,
  • Badli workers in the textile industry.

Professional Tax Slab Rates in Hyderabad, State of Telangana

As per the Telangana Profession Tax Act, 1987, the Commercial Taxes Department regulated by the Telangana government is entrusted with the responsibility for collection of the profession tax due in the state. The professional tax slab rate is revised every year. Given below is the professional tax slab rate of Andhra Pradesh for the financial year 2015-2016 depending on the salary.

Monthly Salary (Rs.) Professional Tax Payable Per Month
Upto 15000 NIL
15000 to 20000 Rs. 150
Above 20000 Rs. 200

Professional Tax Slab rate for Professionals including Legal practitioners, Chartered Accountants, Engineers, Architects, Management Consultants, Medical Practitioners, Journalists, Medical Consultants, Dentists, Radiologists, Pathologists whose standing in the profession is:

Upto 5 years NIL
More than 5 years Rs. 2500 per annum
  • If an assessee fails to make payment of any amount of tax within the time specified in the notice of demand, the assessing authority may, after giving him a reasonable opportunity of making his representation,impose upon him a penalty which shall not be less than 25% but not exceeding 50% of the amount of tax due.

    Note: The Telangana Profession Tax Act,1987 bars local administration from levying the profession tax. Also, the act bars the court to entertain pleas related to the profession tax disputes in the state.