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Professional tax is a tax paid by an individual who earns money through his/her profession and is liable to pay some amount to the government. Such kind of tax is applicable irrespective of the occupation an individual holds. Deductions are usually in form of house rent allowance, conveyance, professional tax, etc.
The maximum limit of professional tax is Rs.2500 per year and, it varies from one state to another. Why it varies from one state to another? This is because the professional tax is implemented by the state government. However, there are certain states and union territories that do not charge professional tax. Professional tax can be paid in 12 equal installments distributed over a year.
In certain cases, companies at their level deduct the professional tax of their employee from their monthly salary and file their tax to the government. In case of any failure to do so, they may be subject to penalties as not paying professional tax is a punishable offense.
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