Professional Tax Payable by the employees working in Karnataka State

Whether employees working in Karnataka State have to pay Profession Tax?

Yes. As per Section 4 of The Karnataka Tax on Professions, Trades, Callings and Employment Act, 1976, the tax payable under this Act by any person earning a salary or wage, shall be deducted by his employer from the salary or wage payable to such person before such salary or wage is paid to him.

How much tax is payable?

Suppose the employer fails to remit this amount to the government, after deduction from the salary, whether the employee is under any obligation to pay?

No. Liability to discharge the tax is on the employer. As per Section 4 of the Act “……….and such employer shall, irrespective of whether such deduction has been made or not when the salary or wage is paid to such persons, be liable to pay tax on behalf of all such persons”

By paying Profession Tax, will the employee benefits in anyway?

Employee will get only income tax benefit by way of deduction from his total income for purpose income tax calculation under section 16 (iii)

Is there any exemption from payment of profession Tax?

Yes. There are certain general exemptions, but the employees are concerned, the following people are exempt from tax payment –  

a.) Directors of Companies registered in Karnataka and nominated by the financing agencies owned or controlled by the State Government or by other statutory bodies.

b.) Foreign technicians employed in the State provided their appointments are approved by the Government of India for the purpose of exemption from payment of income tax for the said period( exemption is for a period of 2 years from the date of their joining duty).

c.) Combatant and civilian non combatant members of the Armed Forces who are governed by the Army Act, the Navy Act and the Air Force Act.

d.) Salaried or wage earning blind persons.

f.) Salaried or wage earning deaf and dumb persons( a deaf person who is unable to speak).

h.) A Physically handicapped person not less than 40% of permanent disability (subject to production of certificate from the HOD of Government Civil Hospital).

i.) An ex-serviceman

j.) A person having single child and who has undergone sterilization operation, subject to production of a certificate from the District Surgeon, Government Civil Hospital, for having undergone such operation.

k.) Central Para Military Force (CPMF) Personnel.

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