Profession tax is the tax levied and collected by the state governments in India. Different states have different rates and methods of collection. In India, professional tax is imposed every month. However, not all states impose this tax. The states which impose professional tax are Punjab, Uttar Pradesh, Karnataka, Bihar, West Bengal, South Delhi, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, Jharkhand and Sikkim, Mizoram.

Profession tax is levied and collected by the Commercial Taxes Department of State Governments, in some states by particular Municipal Corporations and the majority of the Indian states are collecting this tax. It is a source of revenue for the government. The maximum amount payable per year is INR 2,500 and in line with tax payer’s salary, there are predetermined slabs. It is also payable by members of staff employed in private companies. It is deducted by the employer from their employee every month and remitted to the state and in some states sent to the Municipal Corporation. It is mandatory to pay professional tax. The taxpayer is eligible for an income tax deduction for this payment.