The Empowered Committee (EC) of Finance Ministers of States demanded on Monday that the upper limit on professional tax, currently capped at Rs. 2,500, be removed by amending the Constitution.
The EC also decided to urge the Centre to bring an end to “Centrally-sponsored schemes” and provide funds directly, along with suitable guidelines, to the States according to their needs.
“The committee has come to the conclusion that the upper limit of Rs. 2,500 imposed by the Constitution in 1988 should be removed forever,” Bihar Deputy Chief Minister and EC Chairman Sushil Kumar Modi told journalists here.
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Article 276 of the Constitution empowers the States to levy tax on professions. Contending that incomes of professionals had increased manifold, Mr. Modi said removal of the upper limit on the professional tax would bring in more revenue to the States.