As the name suggests, Professional tax is a taxation levied by the state on the income earned by the means of profession, trade, calling or employment. This tax varies from one state to another and even the tax filling procedures differ. The tax is applicable to all individuals who are working individuals, business owners, merchants etc.

While on one hand all individuals who are self-employed have to pay the professional tax themselves, when it comes to employees, it becomes the duty of the employers to deduct the professional tax from the salaries. Professional tax also functions on the Ad Valorem slab rate method and hence there are different slabs depending on the amount of earning. All individuals or bodies who are liable to pay the professional tax have to register themselves as payees with the corresponding local professional tax department.