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Who is Responsible for Deducting Professional Tax? The employer is responsible for deducting professional tax from the salaries of his employees and paying the amount so collected to the appropriate state government. An employer has to furnish a return to the tax department in the prescribed form within the specified time along with proof of tax payment. Professional Tax in India The maximum amount of Professional Tax that can be imposed by any state in India is ₹ 2500.00. The total amount of Professional Tax paid during the year is allowed as a deduction under the Income Tax Act. The Professional Tax is a source of revenue for the State governments which helps in implementing schemes for the welfare and development of the region. Professional Tax is deducted by the employers from the salary of the salaried employees and is deposited with the State government. Other individuals, pay it directly to the government or through the local bodies appointed to do so. Consequences Failure to Obtain Registration Liable to a penalty for the period during which they remain unregistered. Failure to Deposit to the Government or Late Deposition Liable to a penalty for the period during which they remain unregistered. Non-Deposition of Amount The officials have the power to recover such amount along with applicable penalty and interest from the assets of such defaulter. Moreover, they can attach his bank account also. In serious cases, a prosecution case also can be filed.