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Gujarat Professional tax is levied by the local municipal authorities on the professionals, and individuals who earn through a profession, employment, or business.
Article 276 clause (2) of the Indian constitution gives the State Government the right to collect professional tax that cannot exceed Rs. 2500 annually on any taxpayer.
In this article, we will look into the details related to professional tax, the process to collect, and the payment mode.
Professional tax is levied on people who carry out professional trade in India and the employees. The maximum amount that a municipal authority can levy and collect is Rs. 2500 annually on any taxpayer. The amount paid as a professional tax will be deposited to the concerned state government. The amount paid annually as professional tax qualifies for deduction under the Income Tax Act, 1961.
When a person is starting a new business, then some professional tax points are to be kept in mind.
The payment of professional tax depends upon the salary and income of an individual and the state’s tax slab rates. The tax is deducted from the employee’s salary or income by the company’s owner or business.
In case when the employer has more than 20 employees, then the payment of professional tax must be made within 15 days from a month-end. However, if the employees are less than 20, then the payment can be made on a quarterly basis.
The taxpayer has to apply for registration within 30 days to the concerned state department for the registration certificate. Separate applications must be made in case of the individual has more than one business.
The documents required for professional tax registration in Gujarat are:
The state government sets the tax slab rate. It varies from state to state.
The tax slab rate for professional tax in Gujarat is in the table below.
Monthly Income of Taxpayer
Professional Tax Amount Payable
Employees earning upto Rs. 5,999
Employees earning between Rs. 6,000 to Rs. 8,999
Employees earning between Rs. 9,000 to Rs. 11,999
Employees earning more than Rs. 12,000
Professional tax rate for Individuals & Firms
The tax slab rate for professional tax in Gujarat for individuals & firms is in the table below.
Individuals / Firms
Annual Rate of Professional Tax
Advocates, solicitors, notary, Doctors, Engineers, Architects, Chartered Accountants, Brokers, contractors, agents, Health & recreation club, etc. and all types of professionals as per the Finance Department notification dated – 1/4/2008.
Owners of all private & public companies, banking companies, factory, etc.
Individuals or professionals paying tax separately in more than one branch
The registered dealers having annual turnover:
i. Not exceeding Rs. 2,50,000
ii. In between Rs. 2,50,000 and Rs. 5,00,000
iii. In between Rs. 5,00,000 and Rs. 10,00,000
iv. More than Rs. 10,00,000
The steps for online registration of professional tax in Gujarat are:
The steps for online payment of professional tax in Gujarat are:
The modes of payment for a professional tax in Gujarat can be:
No. of Employees
Less than 20 employees
Before 15th of the following month
More than 20 employees
Before 15th of the month subsequent of every quarter (for example, 15th October for July to September quarter.)
A penalty can be imposed for the delay in payment of professional tax in Gujarat, i.e., 18% p.a. on the unpaid tax computed on a daily basis.
Gujarat Professional tax is not only a tax that is levied by the local municipal authorities on the professionals, but it is also levied on any individuals who earn through a profession, employment, or business.
Thus, it is mandatory for persons to have an income or salary to register for the Gujarat professional tax.
Read our article:All about Assam Professional Tax Registration
Completed BA LLB from JEMTEC, School of Law, Greater Noida (Affiliated to GGSIP University, New Delhi). I have an experience of about 2 years in various fields of corporate laws, but I have a keen interest in researching on legal issues and to gain knowledge. I always strive to bring the best to work on what I do.
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