Professional tax is a direct tax levied and collected by state governments in India on individuals earning income through employment, profession, trade, or business. It applies to salaried employees, self-employed professionals (such as lawyers, doctors, chartered accountants, engineers), freelancers, business owners, and merchants

. Key points about professional tax:

• It is imposed by state governments under Article 276 of the Indian Constitution.
• The tax is deducted monthly by employers from employees' salaries and remitted to the state government or municipal corporation. Self-employed individuals must register and pay it themselves

• The rates and slabs vary from state to state, but the maximum annual amount payable is capped at ₹2,500

• It is a source of revenue for states, used for local development and welfare activities

• Professional tax is separate from income tax and eligible for deduction when filing income tax returns

In summary, professional tax is a state-level tax on professions, trades, and employment income, mandatory for applicable individuals, with varying rates across states but a maximum yearly limit of ₹2,500