The Bihar State Assembly on 30 August 2011 passed the Bihar Profession, Trade, Livelihood and Employment Tax Bill, 2011, paving the way for the imposition of the tax. All salaried persons, professionals or self employed working in the state having an income of more than 3 lakh will have to pay professional tax. Anyone with an annual income of three lakh to five lakh will have to pay one thousand rupees as professional tax, and those in the income bracket of five lakh to ten lakh will have to pay two thousand, while those having an income of over ten lakh will end up paying rupees two thousand five hundred every year.
The employers will collect the professional tax from salaried people working in private firms or government as per the TDS (Tax Deducted at source) module. Self-employed professionals like doctors, lawyers and accountants would also be covered under the professional tax.
Under the provisions of the new legislation, the Commercial Taxes Department would be the nodal body to collect the professional tax instead of municipal bodies, which collect the professional tax in their respective areas.
In case of non-payment of taxes, an employee would be liable to a fine of two per cent at simple interest rate per month on the outstanding amount. If the rules are violated, the employer or an employee would be liable for three months simple imprisonment or a fine of Rs 5000.