Professional tax may shoot up by Rs 7,500
Doctors, lawyers and other professionals - both salaried and self-employed - may now have to pay higher professional tax. ULIP: A tax saving tool | Day in pics
By ET Bureau |
NEW DELHI: Doctors, lawyers and other professionals ��� both salaried and self-employed ��� may now have to pay higher professional tax. Acceding a longpending demand of the state governments, the Centre has decided to raise the ceiling on professional tax from Rs 2,500 to Rs 7,500 per annum . The Union Cabinet is expected to take up the proposal on Thursday.
Professional tax is levied by state governments or local bodies on professions, trades, callings and employments . The power to levy the tax flows from the Article 276 of the constitution that also puts a cap on the amount of tax.
The Centre will now amend the Article 276 of the Constitution to raise the limit. Though, Delhi does not impose this tax, several other states like Karnataka, Maharashtra , West Bengal, Andhra Pradesh, Tamil Nadu and Gujarat do so.
The limit was last fixed in 1998 at Rs 2,500 per annum.
Professional tax is levied by state governments or local bodies on professions, trades, callings and employments . The power to levy the tax flows from the Article 276 of the constitution that also puts a cap on the amount of tax.
The Centre will now amend the Article 276 of the Constitution to raise the limit. Though, Delhi does not impose this tax, several other states like Karnataka, Maharashtra , West Bengal, Andhra Pradesh, Tamil Nadu and Gujarat do so.
The limit was last fixed in 1998 at Rs 2,500 per annum.
| | | Also Read |
| | �� | |
| | �� | |
| | �� | |
| | �� | |
| | �� |
Increase in tax has been a long-pending demand of the states pointing at rise in income levels in past few years. The Centre���s reluctance to state government���s demand for a hike in the limit is borne out of the fact that taxpayers who pay professional tax are eligible for a deduction under the Income Tax Act.
So, while, the state governments��� revenues grow, the Centre loses tax on this count.
However, with the direct tax collections witnessing stupendous growth, state governments had intensified pressure on the Centre.
Their argument has been that this tax does not have any substantial impact on Centre���s total kitty as total collection under this head by states was only about Rs 3,500 crore.
Some state governments had wanted the limit to be increased to Rs 10,000 per annum, the Centre has agreed to raise it to Rs 7,500.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
