I'm in the process of setting up the legal documents and the discoveries I make almost on daily basis shock me like anything! As an employer, the hiring company must deduct a professional tax from employee's salary! In other words, the professionals will have to pay the price for being professional! How insane can it be? This tax is collected by the state government and not the central government. It's also interesting to note that not all the states in India collect professional tax; only select few states require professional to be taxed - Maharashtra, New Delhi, Gujarat, Karnataka, WB, MP, Tamil Nadu, Andhra Pradesh. I'm not sure about the other states though.
There's also a correlation between the salary offered to the employee and the professional tax he/she must pay. In Maharashtra, it's as follows-
- (Salary) < 5000 pm : NIL
- Rs. 5001 - Rs. 10,000 pm : Rs. 175 pm
- > Rs. 10,000 pm : Rs. 200 from April to February and Rs. 300 for month of March (?)
Don't you think professional tax is totally useless and just a government's ploy to loot the professionals? Would like to know from startup folks here what do they think about this type of taxes.