The state government levies a professional tax, and it is used towards the improvement of services for professionals in the state. As per Article 276, the State government is authorized to levy a professional tax for a maximum of Rs 2,500 per person and cannot charge more. It is levied on employees, a person carrying on the business including freelancers, professionals, etc., subject to income exceeding the monetary threshold by the state where the income is earned.
PT differs from state to state. All states follow a slab-based system based on the income to levy professional tax. The deduction cycle may be monthly, half-yearly or yearly, relying upon your state.
Professional Tax (PT) will differ for each employee based on their work location and salary slabs.
To configure the Professional Tax
- Navigate to settings> Payroll settings> CTC Components > Click Statutory components> Professional tax.
- Click on the EDIT button of any state.
- You can view the pre-configured deduction cycle and tax slabs.
- Status toggle is set as “Active” as Professional Tax is mandatory.
- Now all you have to do is type your PT number.
- Tap on the “Save” button.