IMPOSITION OF DEVELOPMENT TAX IN PUNJAB
Punjab government is imposing an amount of Rs. 200 per month as development tax on all government professions, traders, callings and employment for the benefit of the state of Punjab. The Punjab State Development Tax Act,2018 got approval from the governor on April 2018. The act has come into effect from April itself. The employees would receive their salaries after deduction of development tax for the past months counting from April 2018.
However, nothing has been said about how non-governmental employees would pay their tax. Senior citizens and people engaged in agricultural practices exclusively and extensively would be exempted from paying the development tax.
In case of the employees, the tax would be deducted by the employers before the payment of salaries to the employees. However, in case of businessmen, they need to register themselves under this act and are liable to pay taxes.
The government would benefit a lot from this tax and it is expected it would earn a revenue of over Rs. 150 crores annually.
A penalty of INR 5000 would be charged both to the employer as well as tax payee in case any false information is being provided intentionally. If an employer fails to deduct tax at the time of payment of the salary, simple interest of 2% of amount of tax per month would be charged.
The imposition of development tax has undergone a lot of criticism. But Manpreet Singh Badal, the finance minister of the state justified the levying of taxes by saying that many progressive states such as Gujarat, Maharashtra, Tamil Nadu etc. have been charging taxes for years now.