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The state or union territory imposes a direct tax known as the profession tax. This tax applies to income earned through any profession, occupation, or trade. Article 276 (2) of the Indian Constitution gives state governments the ability to impose and collect professional taxes. However, not every Indian state collects professional taxes. Professional taxes are not the same as income taxes, but they can be deducted from the latter. This tax is levied on people who work in professions such as doctors, lawyers, engineers, government or non-government employees, individuals, companies, firms, cooperative societies, Hindu undivided families, associations of persons, or corporations.
You can claim a deduction for professional taxes from your income tax payment. According to Section 16 of the Income Tax Act of 1995, employees can deduct professional taxes.
The state will use the revenues received to assist in the implementation of numerous welfare projects for the residents of that geographical region.
Professional taxes must be paid in accordance with state law. The professional must be paid on time, before the due day. It will assist the person in obtaining an exemption from the penalty imposed by the Income Tax Act of 1995.
In some circumstances, individuals experience significant financial losses when they do not pay their taxes. Paying professional taxes can help you avoid these negative situations.
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