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The state has the power to make laws only with respect to the Concurrent and state list. It is levied on employees, a person carrying on the business including freelancers, professionals, etc., subject to income exceeding the monetary threshold if any.Īs per Article 246 of the Constitution of India, only Parliament has the exclusive power to make laws with respect to the Union List which includes taxes on income. Professional tax is a tax on all kinds of professions, trades, and employment and is levied based on the income of such profession, trade and employment. Unlike the name suggests, it is just not the tax levied only on professionals. The nomenclature ‘Professional tax’ could be one of those terms which do not completely convey the real meaning of the term. What is a professional tax and who levies it? Hence, this article is an attempt to provide a better picture of what is ‘Professional tax’ and why is it deducted and whether is it only the salaried class who are bearing it. But all of them may or may not understand what it is and why is it appearing in their payslips/ Form 16 as a deduction from their salary income. Many salaried employees might be very well aware of the term ‘professional tax’ as it would have been mentioned in the payslips/Form 16 issued to them.
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