The ceiling on the tax on professions, trades, callings and employments that a State can levy was raised from 250 rupees to 2,500 rupees per annum by the:

The 60th Constitutional Amendment Act, 1988, amended Article 276 of the Constitution and raised the maximum limit of the profession tax that a State (or a municipality or other local body) can levy from 250 rupees to 2,500 rupees per person per year.

Article 276:

• It allows the State Legislatures to impose taxes on professions, trades, callings and employments, for the benefit of the State or a municipality, district board or other local authority.
• The total amount payable by any one person in a year cannot exceed the limit fixed by the Constitution.
• The original Constitution fixed this limit at 250 rupees per year.

Why the limit was raised:

• The limit of 250 rupees had become very low due to inflation over nearly four decades.
• The states wanted more revenue from this tax, to meet their growing expenditure.
• The Sarkaria Commission had also recommended that the ceiling be raised and reviewed periodically.

How profession tax is collected:

• Employers deduct profession tax from the salaries of their employees and pay it to the state government.
• Self-employed persons, such as doctors, lawyers, chartered accountants and traders, pay it directly.
• Profession tax is deductible from income for the purpose of central income tax.

States that levy profession tax:

Many states, such as Maharashtra, Karnataka, West Bengal, Tamil Nadu, Andhra Pradesh, Telangana, Gujarat and Kerala, levy profession tax; several others, such as Delhi, Uttar Pradesh and Rajasthan, do not.

The tax and GST:

Profession tax was not subsumed in the Goods and Services Tax, and continues to be levied by the states.

Demands to raise the limit:

Some states and finance commissions have suggested raising the limit of 2,500 rupees, which has not been changed since 1988.

Why not the other options?

• ✗The 59th, 62nd and 80th Amendments dealt with other matters.