Question : Taxes on professions can be levied by which of the following?
Option 1: State government only
Option 2: Both state and union governments
Option 3: Panchayats only
Option 4: Union government only
Correct Answer: State government only
Solution : The correct answer is state government only .
State governments can levy taxes on professionals. A professional tax is a type of direct tax paid on persons who work in a certain profession. It is a state-level tax, and the rates and rules differ from one state to the next. Individuals who are self-employed and make a particular amount of revenue from their profession are subject to professional tax.
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