Professional tax is a tax imposed by state governments in India on individuals who earn a salary or income through a profession, trade, calling, or employment. It is governed by the respective state's
Professional Tax Act or Rules.
It is deducted at the source by the employer. It is a nominal tax and never exceeds a few hundred rupees a month. The maximum amount of Professional Tax that any state can impose in India is ₹2500.
Further, the total amount of Professional Tax paid during the year is allowed as a deduction under the Income Tax Act.
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