Punjab to Notify Development Tax for Income Tax Payers

Development Tax - Taxscan

The Punjab Government will soon notify a monthly development tax, known as the professional tax in other States, for income tax payees within one week, reports said.

However, a mechanism for tax collection still needs to be put in place and the proposed payees have little clarity on the system that the government plans to follow.

Punjab finance minister Manpreet Singh Badal said rules for the new tax were being framed.

“The tax will be paid voluntarily by the self-employed income tax payees and nobody will want to be on the wrong side of the law for a small sum of Rs 2,400 per annum. That is the system in states like Maharashtra and Gujarat that have already imposed the tax. The tax is expected to generate a revenue of Rs 150-200 crore,” he said.

Reports said that the professional tax will be deducted by employers in case of salaried class. In case of failure to do so, the employer will be liable to pay simple interest at 2% of the amount of tax due for each month.

Non-salaried individuals would pay it directly to the government via local officials appointed to collect tax. As per the plan, the tax will be collected from income tax payees having a monthly income of Rs 30,000 per month or above. The Punjab assembly had passed the Punjab State Development Tax Bill, 2018, in its budget session last month. Under the Act, the state government plans to appoint an appellate authority with one officer designated as the commissioner.

In the Bill, there is already a provision of Rs 5,000 penalty for employer or payee deliberately giving false information and it would be 50% if the payment of any amount of tax is not made within the required time frame. However, the penalty would be Rs 50 per day if the registered employer or enrolled person fails to file the return.