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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.
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.
|
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.
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,
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.
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 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.
The State of Madhya Pradesh frees certain individuals from paying professional tax with the State. They are as follows,
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.
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Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
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