Professional Tax in MP (Madhya Pradesh): Everything Explained

When you closely observe your salary slip, you can notice basic salary breakups, allowances such as HRA and a small deduction. This deduction is mandatory for all employees across all states (except some States and UTs). It is known as a professional tax deduction. The deduction amount and some rules vary from one State to another.

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What Is Professional Tax in MP?

Professional tax is a tax that the State Government of Madhya Pradesh levies on individuals who earn income through any medium. It means individuals, whether they are a professional, traders, or employers, must pay professional tax in Madhya Pradesh according to the income threshold set by the State Government.

Madhya Pradesh Professional Tax Act, 1995 (can also be referred to as Madhya Pradesh Vritti Kar Adhiniyam, 1995) is responsible for managing professional tax in MP, and it extends to the whole State of Madhya Pradesh.

The following table shows the PT slabs in Madhya Pradesh,

Salary/ Income (Salary)	Payable Amount (Monthly)
Up to ₹ 18,750	Nil
From ₹ 18,751 to ₹ 25,000	₹ 125
From ₹ 25,001 to ₹ 33,333	₹ 167
₹ 33,334 and above	₹ 208 for the 11 months and ₹ 212 for the last month

Note: Madhya Pradesh Government imposes ₹ 208 for the first 11 months of a financial year and ₹ 212 for the last month of the financial year, particularly for persons whose salary or income is above ₹ 15,000.

As individuals are now aware of the professional tax slab in Madhya Pradesh, let’s move to other important details such as collection, payment process, due date and exemption.

Who Is Responsible for Collecting and Paying Professional Tax in Madhya Pradesh?

The State Government of Madhya Pradesh is responsible for collecting P Tax within the State.

According to Article 276 of the Indian Constitution, professional tax is levied on professions, trades, callings and employment. Therefore, individuals of Madhya Pradesh involved in any profession, calling or trade, or employment must pay professional tax within the State. To be precise, persons responsible for paying professional tax can be broadly classified into two segments. They are,

Salaried individual
Self-employed individual

How to Pay Professional Tax in Madhya Pradesh?

As stated earlier, individuals earning salary or wages are liable to pay professional tax in MP. Here, the employers are responsible for deducting professional tax from the salary or wages of respective employees and depositing (by the treasury challan) to the State Government on behalf of them.

Note: If employers have paid salary or wages to individuals, they have to deposit the professional tax whether the deductions have been made or not.

On the other hand, self-employed individuals of Madhya Pradesh must pay professional tax themselves and submit it to the local authorities designated for the collection of the same.

When Is the Due Date for Professional Tax Payment in Madhya Pradesh?

Employers after deducting professional tax from employees must submit the same within 10 days of the end of the month against which the deduction has been made.

Alternatively, persons other than employees must pay P tax in Madhya Pradesh every year. The dates vary depending on the registration of professional tax in MP. The dates are as follows,

If a person registers before the start of a financial year or registers on or before 31st August of a financial year, he/she has to pay P tax in MP before 30th September of that financial year.
If a person registers his/her business after 31st August of a financial year, he/she has to pay P tax in MP within 30 days of registration.

If employers (on behalf of employees) or self-employed individuals fail to pay P tax with the stipulated date, they have to pay the penalty equal to 2% per month of the total due amount. The penalty amount can rise as high as two-thirds of the total tax due.

Who Are Exempt From Paying Professional Tax in Madhya Pradesh?

The State of Madhya Pradesh frees certain individuals from paying professional tax with the State. They are as follows,

Parents or guardians of handicapped/mentally retarded children
Individuals having a disability of 40% or more of permanent disability or blindness

As working or earning individuals know about slab rates and due dates of payment of professional tax in MP, they can calculate the amount and pay the same within the stipulated date.

Frequently Asked Questions

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Does every employer need to furnish a professional tax return?

Yes, every registered employer must furnish professional tax returns to the Professional Tax Assessing Authority in a prescribed form. They must submit a treasury challan as proof of the full amount of due tax payment.

What are the essential documents for professional tax registration in Madhya Pradesh?

The documents essential for professional tax registration in Madhya Pradesh include Memorandum Of Association, Articles Of Association, lease agreement, name and activities of the firm or organisation, PAN card, bank account details, employer address proof and ID proof and photos, employee list with salary details.