Professional tax keeps state coffers swelling

HYDERABAD: The Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act has gradually begun swelling the coffers of the state exchequer with an impressive collection of over Rs 430 crore in the last fiscal.
Though the contributions have been small, the growth has been significant for the tax collectors to sit and take note of this sector, as the collections have more than doubled in the past five years.
The Act provides for the levy of tax on persons engaged in any profession, trade, calling or employment in the state at rates as low as Rs 60 per month for people earning more than Rs 5,000 per month, and a maximum of Rs 200 per month for those earning more than Rs 20,000 per month. The state exchequer received Rs 199 crore in 2005-06, Rs 250 crore in 2006-07, Rs 362 crore in 2007-08, Rs 381 crore in 2008-09 and around Rs 430 crore in 2009-10.
Deputy commercial tax officers (DCTOs) are empowered to exercise functions under this act within their respective jurisdictions as notified under the AP General Sales Tax Act 1957.
Official sources said that the collections were indeed significant as the then chief minister Y S Rajasekhara Reddy in 2007 had rationalised the tax structure and tax slab for profession tax. He exempted all employees drawing a salary of less than Rs 5,000 a month from paying the profession tax.
Officials, however, said that blind or employees having severe disability were exempted from paying profession tax.