All you want to know about The Punjab State Development Tax Act, 2018 (Professional Tax)

Date of enactment of Act: April 16, 2018

(However Rules, Forms, Portal for registration/ payment etc has not been prescribed by Govt.)

Who is liable to pay development tax?

Every employee or person doing business or profession in Punjab is liable to development tax if after deduction income is above maximum exemption limit i.e. Rs. 2,50,000/- at present as per Income Tax Act. Section 4 also mention ‘Income tax payee’ which creates confusion as Person with Total Income above Rs. 3,00,000/- is income tax payee due to rebate of Rs. 2500/- Secion 87A of Income Tax Act. Punjab State Govt should clarify the same.

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.

Exempt persons:

  1. Senior Citizens
  2. Persons exclusively engaged in Agricultural activity

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

Who will pay tax? (Section 5)

  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.

If an employee is employed from more than one employer then he can register himself u/s 6 under this act and give declaration to employers then employer is not liable to deduct his tax. 

Registration (Section 6)

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.

What is Last Date to apply for registration?

Within 60 days from date of Act i.e. before 15th June 2018 for existing persons. Persons who become liable in future due to start of new business or profession or increase in income will have to take registration within 30 days from which they are liable.

Penalty for failure to register can be imposed at Rs. 50/- per day 

Payment of Tax (Section 10)

Employees’ tax will be deducted and paid monthly.

Tax by others will be paid once in a year within 30 days from date of registration.

Late deduction, Late Payment will attract simple interest @2% for every month or part of month.

Filing of Returns (Section 7)

Due date, Format, period of returns shall be as prescribed.

Penalty for failure to file returns can be imposed at Rs. 50/- per day

Assessment (Section 8, 9)

Filed returns will be accepted by designated officer else notice will be issued for assessment. Assessment can be done within 3 years (6 years in case of special circumstances as prescribed) from date of filing of return or due date whichever is later. Any additional demand shall have to be paid within 15 days.

Article by CA Shashi Bhushan, Jalandhar

Email: ca.shashibhushan@yahoo.com , Phone: 98887-06464

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21 responses to “All you want to know about Punjab State Development Tax Act, 2018 (Professional Tax)”

  1. kanwarpreet says:

    sir as it is state government tax, do we have any provision to get rebate of the amount paid in development tax while filling our income tax return. or its be deducted from the gross income while filling return.

  2. ashok says:

    Sir,Whether professional tax registration has been started or not now dt. 4-8-18? If started ,please inform us procedure and website name.

  3. Avdesh Kaushik says:

    Please let me know that when the portal will available for registration for payment of Punjab Development Tax Act-2018 or can we deposit through challan at SBI branch.

  4. Mandeep says:

    On which site we have to register for state development fund

  5. komal says:

    sir i am a punjab govt employee. i am paying home loan also. after all standard deductions and 80c deductions my taxable income is 2,06,000 only. My employer has deducted 200 per month development tax from my salary. is it right sir??? Coz my taxable income is less than 2,50,000. then why such tax deducted?

  6. s p singh says:

    whether there is any deduction of development tax deducted

  7. rajat kumar says:

    please tell me us the process for registration for professional tax in punjab

  8. Rakesh says:

    On which income we deduct PT. is taxable income is more than 2.5 lacs or 3 lacs as after providing rebate.

    • CA.SHASHIBHUSHAN@YAHOO.COM says:

      There is confusion at present. As employer, its better to deduct tax if after deduction Income is above 250000.
      clarification should be taken from department but at present no authority has been identified.

  9. pranav says:

    Sir,
    Plz tell about the registration form

    • CA.SHASHIBHUSHAN@YAHOO.COM says:

      Form/Procedure is expected to be released by govt soon. we have to wait. thanks.

  10. Benz says:

    Can you please clarify whether the income mentioned is the gross salary or taxable income, (income after all exemptions and deductions) to be considered for the pt eligibility. if its taxable income how an employer to take care of the same if the taxable income changes over the period. ie if income increases or decreases by end of the FY.

    • CA.SHASHIBHUSHAN@YAHOO.COM says:

      Taxable Income is to be considered. Means Income after standard deduction of 40k, Investment/insurance is to be seen. tax to be deposited based on estimated like TDS. If increased in future then whole amount of applicable tax can be deducted and deposited in that month.

  11. Amit says:

    Hello,

    I’m a contractual employee of a company headquartered in Delhi. I’m posted to the regional office of this company which is in Chandigarh. And I frequently travel to various cities of Punjab for business meetings / seminars.
    Am I also liable to pay this tax?

    Please clarify.

    Thanks

    • CA.SHASHIBHUSHAN@YAHOO.COM says:

      If Employer who pay you salary is in Chandigarh and you also working in Chandigarh, then tax not applicable according to me. Tax is in Punjab State only. Visiting Punjab for occasional meetings doesn’t make difference.

  12. Paramjeet Singh says:

    Dear sir

    Thanks for important information.

    Further, please let me know that if a person getting incomes from Salary as well as income from business and profession, in such case, is he liable for pay double i.e. Rs. 200/- plus Rs. 200/-

    And also further, please let me know that when the portal will available for registration, payment of said tax.

    And also further, please let us know that can we deduct an amount of Rs. 200.00 from employee who are liable for deduction from April.2018

    And also further, please let me know that is this tax applicable only such person who has besiness income above of Rs. 2.50 Lakh and eligible to get their account audit under section 44AB of Income Tax Act

    • CA.SHASHIBHUSHAN@YAHOO.COM says:

      It has mentioned in the Act that there will be no double taxation. If employer is deducting then no need to deposit by assessee.
      Portal, Form etc not yet launched by govt.
      Development tax is to be deducted for whole year. Means for April month also, but since Rules not prescribed yet so you can deduct in May month for April+May.
      Audit has no role to decide levy. If employer is paying to even single employee with Total Income above prescribed limit then employer has to register and deduct tax.
      Thanks.

  13. Rajinder Pal Jindal says:

    Very useful sir. Explained in a very nice way. Thanks sir.

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