States in India, including Odisha, levy a professional tax (PT) in accordance with Article 276 of the Indian Constitution. Professional tax in Odisha is a direct tax that applies to businesses, salaried individuals, entrepreneurs and professionals in various occupations. Even though only a small amount is deducted, professional taxpayers in Odisha need to be well-versed in the subject. In this article we will learn more about professional tax payments in Odisha.
If you are a salaried employee, whether government or private, and if you are self-employed engaged in a profession like a doctor, engineer, lawyer, Chartered accountant, company secretary, etc., working in Odisha, you are liable to pay professional tax.
Professional tax in Odisha varies between Rs.1,500 - 2,500, according to the applicable income slab.
The maximum professional tax in Odisha is Rs.2,500 per annum. Persons earning a salary of Rs.1,60,000 annually or less are not required to pay professional tax in Odisha. However, professional tax paid by a salaried individual can be claimed as a deduction under the old regime of the Income Tax Act.
The Odisha Professional Tax Act is part of the state Tax on Professions, Trades, Callings and Employment Act, 2000.
Under this act, every person engaged in any profession, trade, calling, or employment in the state of Odisha, including a HUF, firm, company, cooperative body, society, club, or association, is mandated to obtain registration to deduct professional tax. The Commercial Taxes Department of the Odisha government is in charge of collecting this tax.
Every employer in Odisha must register under this act as a Professional Tax Deductible. Additionally, every self-employed professional who is liable to pay professional tax must register.
Apart from employed and self-employed individuals, this tax is applicable to companies, firms, LLPs, corporations, HUFs, clubs, etc. Take a look at the points below to understand professional tax applicability in Odisha:
The professional tax for salaried individuals depends on the gross salary earned during the year. Self-employed professionals like Medical Consultants, legal practitioners, estate agents, brokers, technical and professional consultants, etc., depend on the gross income earned during the year. Check the table below to find out the professional tax slab rate in Odisha:
Annual Gross Salary/ Income | Professional tax amount |
Up to Rs 1,60,000 | Nil |
Between Rs 1,60,000 and Rs.3,00,000 | Rs 125 per month. (Rs.1500 Per Annum) |
Above Rs.3,00,000 | Rs. 200/- per month for first 11 months and Rs. 300/- for the month of April. (Rs.2500 Per Annum) |
If you are wondering how to make professional tax payments online, you can follow these simple steps.
Step-1: Visit the official website of Integrated Financial Management system-Odisha and select the 'e-payment' option. This option would be available in the 'Other e-Services' box.
Step-2: Payment can be made using the PT registration / Enrollment Number or the GSTIN by the Taxpayer.
Step-3: Once redirected, click on ‘Commercial Tax’ from the options available under ‘Online Challan Submission’.
Step-4: Under the ‘Professional Tax’ box, provide the essential details and enter ‘Payment Type’ and ‘Deposit Type’.
Step-5: Click on 'Next' and enter 'Depositor Details' and 'Identification of Depositor' in the relevant boxes.
Step-6: Click ‘Next’ and confirm the details. After verification, you can view the 'Make Payment' webpage.
Step-7: Select the suitable payment gateway. Now, select 'Proceed Payment' and click on the 'Pay' option.
Step-8: Professional Tax can be paid online through the Odisha Treasury Portal using Net Banking, UPI, Credit / Debit Cards and through SBI e-Pay.
For those who enroll before May 31 of a financial year, the professional tax due date is June 30. Simultaneously, people who enroll after May 31 are required to pay professional tax within one month of enrolment.
Employer shall furnish a return in Form-V before the end of the succeeding month disclosing all the tax deductions made during the month from his employees salary. It is challan-cum-statement Form.
Not paying professional tax or deducting it from an employee’s wages will lead to the payment of simple interest of 2% on the due amount or a portion of the remaining unpaid tax period. Additionally, in Odisha, failure to pay professional tax without a valid reason could result in a penalty of 25% to 50% of the total due amount with interest charges.
According to the statute, members of the armed forces of the Union serving in any region of Odisha are exempt from paying professional tax.
If you are liable to pay professional tax in Odisha, make sure to follow the simple steps mentioned above to pay the tax on time. Once you know your applicable tax slab rate, you can make payment effectively to avoid any hefty penalty charges.