Professional Tax is a tax levied on professions and trades in India. It is a state-level tax and must be compulsorily paid by every staff member employed in private companies. The business owner is responsible for deducting professional Tax from his employees’ salaries and can then pay the amount so collected to the appropriate government department.
Professional tax is a kind of tax levied by the state government on salaried or self-employed individuals. As per Clause 2 of Article 276 of the Indian Constitution, it is applicable to all kinds of professions, employment, and traders in the particular state. Only 17 states impose a professional tax in India, and Karnataka is one of them.
Professional Tax in Karnataka
The Karnataka state government is responsible for collecting professional tax, depending on your gross income. Whether you are working in a private organisation or are associated with a government entity, it is mandatory for all individuals to pay professional tax in Karnataka.
Additionally, self-employed individuals, doctors, chartered accountants, lawyers, etc., must pay this tax to the local authorities assigned to collect the professional tax. On the other hand, the respective employers levy professional tax in Karnataka for salaried employees.
Karnataka Professional Tax Act
The Karnataka Tax on Professions, Trades, Calling and Employment Act 1976 has laid out the provisions for professional tax payment within the state. As per the Karnataka professional tax rule, the government levies this tax on an individual depending on their income. So, if you are a working professional in Karnataka, knowing the tax slab rates is crucial.
Professional Tax Slab In Karnataka
Here’s a table for a complete understanding of the professional tax slab rate in Karnataka.
| Monthly Salary Range | Amount Payable per Month |
| Rs 1 to Rs 9,999 | 0 |
| Rs 10,000 – Rs 14,999 | 0 |
| Rs 15,000 and above | Rs 200 |
On the other hand, as per Karnataka professional tax act, the amount of tax payable by an employer who is established as per the Karnataka Shops and Commercial Establishment Act, 1961, is as follows:
| Number of employees in the organisation | Tax Rate |
| Between 1 to 5 | Rs 1000 |
| Between 5 to 10 | Rs 1500 |
| Higher than 10 | Rs 2500 |
As per the tax slab, it is imperative for all businesses and employers to make payments on or before April 30 every year. Also, the rule requires employers with an enrolment certificate to file an annual return within 60 days of the financial year closure.
Applicability of Karnataka Professional Tax
he professional Tax must be remitted by individuals and business entities engaged in any profession, trade, callings, or employment — government and private.
- It is mandatory for both salaried and self-employed individuals to pay professional Tax, which is collected by the Karnataka State Government.
- For salaried employees, the professional Tax is levied by employers, whereas non-salaried professionals need to pay it to local authorities appointed for collecting the Professional Tax.
- Doctors, advocates, chartered accountants and every other individual engaged in private professions is liable to pay professional Tax in Karnataka.
Professional Tax in Karnataka is applicable to the following categories:
The professional Tax for a salaried individual will be deducted by the employer from the salary. Business entities such as:
- Sole proprietor
- Partnership firms
- Limited Liability Partnership
- Corporations
- Hindu undivided family (HUF)
- Firms
- Company and other corporate bodies
- Society
- Club or Association
Note: Separate PT registration process on the PT website of the Commercial Taxes Department is not required for companies registering under the Spice+ application process from 8th October 2020.
How to Pay Professional Tax in Karnataka?
- For salaried individuals: For salaried individuals who receive their salary every month, the employers will deduct professional Tax, as per the slabs, from the salary. This is deposited to the concerned authority in the state on behalf of the salaried individual.
- For Self-employed individuals: self-employed individuals and professionals who are not working on a salary basis i.e. those who are not working with any organization and working independently need to pay professional Tax, which can be done by contacting tax offices established in the state to collect the professional Tax.
- For organizations: For organizations, the employers need to register as per the state government of Karnataka’s professional tax regulations.
Professional Tax Payment Online in Karnataka
If you want to pay professional tax in Karnataka, here is a stepwise guide for you.
- Visit the official website of the Commercial Taxes Department Karnataka and select ‘e-Payment’.
- Once redirected, click on ‘Next’. After that, from the available options, click on Karnataka Professional Tax.
- Now select the ‘Dealer Type’ and fill out the necessary information.
- Select the ‘Next’ option to verify all your provided details.
- Click on the ‘submit’ option and note down the auto-generated number for future reference.
- Click on the ‘Click here for payment’ option. Follow the instructions on the screen and click the ‘submit’ option to complete the payment. Finally, payment details will appear on the screen.
Karnataka Professional Tax Payment Due Date
The due date varies from state to state. In Karnataka, every individual liable to pay professional tax must pay it every month before the 20th.
Karnataka Professional Tax Late Payment Penalty
The Karnataka state government levies a penalty for late payment of professional tax. A 1.25% penalty is imposed in such cases. The maximum penalty applicable is 50% of the total outstanding amount.
Karnataka Professional Tax Exemption
- Self-employed individuals who have not served as an employee for more than 120 days in a financial year.
- Salaried individuals with a monthly gross income of less than Rs 15,000 per month.
- Senior citizens above 60 years are eligible for professional tax exemption.
- Blind, deaf and dumb individuals or people diagnosed with nearly 40% of permanent disabilities.
- Members of the Armed forces, such as the Army, Air Force and Navy.
- Foreign technicians employed in the Karnataka state.
FAQs
Is professional tax compulsory in Karnataka?
Who is eligible for professional tax in Karnataka?
All individuals earning Rs 15,000 or above in Karnataka are eligible to pay professional tax every month. For legal or medical practitioners, professional tax eligibility depends on their tenure of service.
How much is the professional tax in Karnataka?
The maximum amount payable as professional tax in Karnataka is Rs 2,500. It depends on the monthly income of the taxpayer.
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