The date of enactment of The Punjab State Development Act is 16th April, 2018. It extends to the whole of the State of Punjab, and offices of the Government of Punjab and offices of any body, whether incorporated or not, which is owned or controlled by the State of Punjab situated in the capital of Punjab

1. Who is liable to pay development tax?

  • Every person, engaged in any profession, trade, calling or employment and falling under any class mentioned in the Schedule, shall be liable to pay the tax if Taxable income for the same financial year, before allowing deduction on account of tax levied under this Act, (Means Punjab Development Tax) exceeds the maximum amount which is not chargeable to Income Tax.

Also Income to be seen is of same year for which development tax is to be paid i.e. to pay development tax of FY 2018-19, Income of same year i.e. FY 2018-19 is to be seen.

Every business operated in Punjab state is liable for the same. No exemption will be allowed just because Head office is in different state.

For example, if a branch of a company is located in Punjab, then employees working in Punjab will be liable to pay this tax.

2. Persons exempted under this tax

1. Senior Citizens

2. Persons exclusively engaged in Agricultural activity

3. Those who are not Income Tax Payee

3. Who will pay tax?

1. In case of employee, employer will deduct tax from salary and make payment to Govt.

2. In case of person engaged in business or profession, he shall be liable to register u/s 6 and pay taxes.

Where an employer or person has more than one place of work within the State of Punjab, he shall make a single application in respect of all such places, declaring therein one of such places as the principal place of work and others as additional places of work.

If a person is simultaneously engaged in employment of more than one employer, such person shall furnish a certificate to each of his employer in Form PSDT- 5 to the effect that he shall get enrolled under the Act and pay the tax himself or the person shall choose any one employer for the purpose of payment of tax under the Act and furnish this information to other employers and the designated officer in Form PSDT-5.

The tax is required to be paid once only. However, it is the duty of the employer to deduct the tax from the salary of the employee and deposit it with the government.

4. Registration 

Every employer liable to pay tax shall obtain a certificate of registration from the designated officer in the prescribed manner within a period of sixty days from the date of the commencement of this Act

5. Who is required to register? 

1. An Employer who is liable to pay salary to person(s) who are covered under Development Tax.

2. Self-employed persons who are running any business and profession and they are liable for this tax.

Who is not required to apply for register?

Employees are not liable to register because their employer is liable to register and deduct tax from their salary.

6. Filing of Returns

  • Every person enrolled or every employer registered under this Act shall make self assessment of tax and shall file return for a period, within such time and in such form as may be prescribed, to the designated officer
  • Every return shall be accompanied by a proof of payment of full amount of tax due according to the return, as may be prescribed.
  • A return without such proof of payment shall not be deemed to have been duly filed.
  • Any employer or person liable to file return, if submits an incorrect statement, if any, may furnish a
    revised return in respect of the period covered by the return at any time before a notice for assessment is served on him

1. In respect of the period covered by the said return or

2. before the expiry of a period of three months from the end of the year to which such return whichever is earlier.

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