Professional Tax Slab in Madhya Pradesh for FY 2018-19

Professional Tax slab in Madhya Pradesh have been revised in State Finance Budget 2018. New rates of professional tax (PT) deduction will be applicable w.e.f. 01.04.2018

Professional Tax or PT is a tax imposed by state governments on salaried employees and businesses. Responsibility of the deduction and payment of employee’s PT lies with the employer.

Before GST got implemented, PT was expected to be subsumed in the GST regime but that did not happen. In the fear of revenue loss under GST, state governments are leaving no stone unturned to balance their revenues after GST, professional tax is one such source for them.

Many employees question this deduction as this tax does not justify its name “professional” with respect to the employment but they do not have any choice.

Madhya Pradesh government in its finance budget 2018 have amended the professional tax slab rates for employees. The new PT rates aim at providing some relief to the salaried employees and increase their take home salary.

Professional Tax Slab in Madhya Pradesh for F.Y. 2018-19

Annual Salary	Annual PT
Below Rs. 225000	NIL
Rs. 225000 – Rs. 300000	1500
Rs. 300000 – Rs. 400000 2000	2000
Above Rs. 400000	2500

PT is deducted from the monthly salary of the employees in equal installments and deposited with the department using professional tax online payment facility.

Below will be the actual monthly PT deduction rate:

Monthly Salary	Monthly PT
Below Rs. 18750	NIL
Rs. 18750 – Rs. 25000	125
Rs. 25000 – Rs. 33333	167
Above Rs. 33333	208

A quarterly employer return Form 7 has to be filed with details of number of employees and month wise deduction.

Earlier the professional tax rate in Madhya Pradesh was Rs. 2500 for any employee drawing annual salary of more than Rs. 1,80,000. Therefore, this amendment gives some relief to the employees working in the state.

PT is also an allowable deduction under Income from Salary chargeable to Income Tax and employees shall definitely avail that benefit while filling their income tax returns.