Understanding Professional Tax: Why Do Employees Pay It and Are There Any Benefits?

What is the use in paying PT and what are the benefits that an employee gets in paying his PT? The only reason I believe is non-taxable. Is there any special reason we pay the tax? Please let me know if there is anything.

Recently, I heard that PT has increased in Trichy where I am working presently, which crosses 1000 INR. Is there any other way to be exempted from this PT, which we pay is no way connected to employee's benefit? Can anyone shed light on my question? Please let me know.

Have you ever thought why you should pay income tax? Have you ever considered how local authorities generate revenue and from which fund they spend money on infrastructure building, such as roads, drainage, etc.? Do you pay anything for walking along a public road, using a public toilet, or waiting room? You pay nothing apart from the taxes you pay to the municipal authorities/local administration. Profession tax is the main revenue of the Panchayat/Municipality/Corporation. When you see a movie at a cinema hall, you pay entertainment tax which goes to the same local administration. This is paid for the entertainment you receive. Similarly, you pay a small percentage of the earnings you receive from your employer as profession tax. The amount is minimal, a maximum of Rs 1250 for half a year. The rate may vary in different states. When you demand more salary and better living conditions, why should tax not be paid? When you criticize the authorities for the damaged roads, remember that you are contributing towards it.

Regards,

Madhu.T.K

But Mr. Madhu, why not pay a single tax as an individual (for development which never happens)... every factory or shop in an area pays panchayat tax for development which is reasonable because a unit doing business is paying tax for the development. Why should an individual pay when providing infrastructure is the duty of the government? An individual pays income tax and not that should be the end of it? Go to any place, railway station or any place... you stand in line for hours. I have traveled across Andhra Pradesh, Karnataka, Maharashtra, and Gujarat... what type of infrastructure is available for a citizen.... nothing.

Industries, institutions, business bodies should pay which is reasonable and understandable... why should an individual pay...?

I believe Madhu is right. This is the only way to generate funds for public welfare. If it is not particularly in your area, maybe another part of your area. Local administration has to decide according to its priority. If somebody can demonstrate in front of the corporation/local administration for their demand, before doing all these, they should realize what their contribution towards this is.

Regards,
Vikram Rana
Admin. Manager

Hi,

Even I also feel that there should be only one system where every eligible person should pay development tax. The rate may be increased to some extent, but in that way, we will get freedom from paying various types of taxes.

Regards,
Jyoti

Dear Mr. Ramamurthy,

I understand your concerns about the poor infrastructure. However, could you explain how we can ensure the participation of everyone who earns money, especially those who do not fall under the purview of Income Tax? People paying income tax also receive a deduction for Professional Tax.

While there may be cities and villages lacking essential infrastructure, this is not solely due to shortcomings in the revenue system but also stems from a lack of commitment from the administration. When we encounter numerous challenges primarily caused by the misconduct of a few individuals linked to major corporations in India, individuals capable of influencing the purchase of a significant number of local governing bodies in India, why should we solely blame the local governing bodies that struggle to secure funds even for basic necessities?

Regards,
Madhu.T.K

In some states, state governments charge a professional tax from outsiders who work in PSUs and private firms in their states. It is mandatory for employers to deduct a certain percentage (which may vary from state to state) of the salary and deposit it with the state government treasury. It depends solely on the discretion of the state government whether to impose this tax or not. Some of the states where this tax is charged include West Bengal, Gujarat, Maharashtra, etc.

Regards,

Dear Mr. Rana,

As far as development is concerned, I have lived and worked in more than three states in manufacturing industries, and the situation is always the same - dusty mud roads, pits, and falls. Rural Maharashtra was a nightmare, and providing proper infrastructure is the duty of the government. I think we should have one tax to cover all our responsibilities as citizens.

Regards,
N. R. M.

But Mr. Madhu, panchayats get their money from industries in their area as panchayat tax, and there are government funds allocated for every panchayat development. We are talking about professional tax that an individual is asked to pay. There are very rich panchayats because of the number of industries in their locality. Panchayat tax is paid by industries based on the built-up area of the factory.

Still, I think there is no need for an individual to pay professional tax for the development of the area.

Regards,

N R M

Dear Mr. Ramamurthy,

One of the basic concepts of levying tax is the involvement of individuals in public funds. In the case of PT, the same principle applies. I do understand the infrastructure available in panchayats despite the amount collected by way of different taxes. However, as citizens of India, all of us are equally responsible for following the rules framed by the appropriate authorities.

For factories and establishments, a separate profession tax payable based on their turnover is also applicable. Additionally, the license fees based on the plinth area occupied are also payable. It is important to note that whatever is paid under these heads is treated as a business expenditure, for which a 100% exemption is granted. Furthermore, panchayats do not take any share of the profits earned by companies.

Regards,
Madhu.T.K

Hi,

Thanks to all your replies, sir. As per your statement, the local municipality raises its fund for development as PT. Then, what are they doing with road tax, house tax, water tax? I believe EB is also added with tax, and finally IT. If this much tax is paid by an individual and it does nothing for the development of our country, then why pay them? Even in the central budget, I see funds being allocated to each state. Where are those funds? Adding to it, our fund is also included, so where is the development? If excuses are made due to bad administrators of the municipality, who is going to take care of it? As a taxpayer, I believe everyone has the responsibility. Hence, I believe only centralized taxation will provide us with a clear solution.

It does not matter the meager amount being collected, why and for what is it being collected?

Sorry if I am wrong anywhere; it's just information I want to share in the forum - that all this happens not only due to bad administrators but also due to our silent compliance.

Thanks,
Sundar