Professional Tax Registration
Professional Tax Registration
Market Price – Rs: 17,899
OnlineTaxSeva Price- Rs: 12,599 (All Inslusive)
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Documents Required For Professional Tax Registration
Incorporation Certificate |
PROFESSIONAL TAX
Professional tax is a tax levied by state governments on salaried individuals, professionals, and businesses based on their income and profession. It is a source of revenue for state governments, and the proceeds are usually used for the development of the state. The tax is usually collected by the employer on behalf of the government and deposited with the state treasury. The amount of professional tax and the frequency of payment vary from state to state in India.
Applicability of professional tax:
Professional tax is a tax levied by state governments on individuals who are engaged in a profession, trade, or employment. The applicability of professional tax varies from state to state in India, as each state has its own laws and regulations governing the tax.
In general, professional tax is applicable to individuals who are working in the private or government sector, and earning a monthly income above a certain threshold, which varies from state to state. In some states, professional tax is also applicable to self-employed individuals, such as doctors, lawyers, chartered accountants, and consultants.
Professional tax is typically collected by the employer from the employee’s salary and then remitted to the state government. However, in some states, such as Maharashtra, it is the responsibility of the employee to pay the tax directly to the government.
It is important to note that professional tax is not applicable to individuals who are engaged in agriculture or those who are not earning a regular income. Additionally, certain categories of individuals, such as senior citizens and persons with disabilities, may be exempt from paying professional tax in some states.
WHO PAYS PROFESSIONAL TAX
| State | Who Pays Professional Tax? |
|---|---|
| Andhra Pradesh | Employees earning more than Rs. 15,000 per month |
| Assam | Every person engaged in any profession or trade |
| Bihar | Every person engaged in any profession or trade |
| Gujarat | Every person engaged in any profession or trade |
| Karnataka | Every person engaged in any profession or trade |
| Kerala | Every person engaged in any profession or trade |
| Madhya Pradesh | Every person engaged in any profession or trade |
| Maharashtra | Employees earning more than Rs. 7,500 per month |
| Meghalaya | Every person engaged in any profession or trade |
| Odisha | Every person engaged in any profession or trade |
| Punjab | Every person engaged in any profession or trade |
| Rajasthan | Every person engaged in any profession or trade |
| Tamil Nadu | Every person engaged in any profession or trade |
| Telangana | Employees earning more than Rs. 15,000 per month |
| Tripura | Every person engaged in any profession or trade |
| West Bengal | Every person engaged in any profession or trade |
PROFESSIONAL TAX RATES
| State | Monthly Salary/Wage | Professional Tax Rate |
|---|---|---|
| Andhra Pradesh | Above Rs. 15,000 | Rs. 200 – Rs. 2,500 per annum |
| Assam | Above Rs. 10,000 | Rs. 180 – Rs. 1,200 per annum |
| Bihar | Above Rs. 10,000 | Rs. 200 – Rs. 2,500 per annum |
| Chhattisgarh | Above Rs. 8,333 | Rs. 150 – Rs. 1,000 per annum |
| Gujarat | Above Rs. 7,500 | Rs. 2,400 per annum |
| Karnataka | Above Rs. 15,000 | Rs. 200 – Rs. 2,500 per annum |
| Kerala | Above Rs. 20,000 | Rs. 2,500 per annum |
| Maharashtra | Above Rs. 7,500 | Rs. 2,500 per annum |
| Madhya Pradesh | Above Rs. 7,500 | Rs. 1,500 per annum |
| Odisha | Above Rs. 10,000 | Rs. 200 – Rs. 1,500 per annum |
| Tamil Nadu | Above Rs. 21,000 | Rs. 800 – Rs. 2,500 per annum |
| Telangana | Above Rs. 15,000 | Rs. 800 – Rs. 2,500 per annum |
| Uttar Pradesh | Above Rs. 10,000 | Rs. 120 – Rs. 2,500 per annum |
| West Bengal | Above Rs. 8,500 | Rs. 234 – Rs. 2,500 per annum |
DEDUCTION AND PAYMENT OF PROFESSSIONAL TAX:
Professional tax is usually deducted by the employer from the employee’s salary or wages on a monthly basis. The employer is responsible for deducting the tax and remitting it to the state government within the prescribed time period.
The process of deducting and paying professional tax involves the following steps:
Registration: The employer is required to register for professional tax with the concerned state’s tax department. This can usually be done online through the state’s official website.
Deduction: Once registered, the employer must deduct the professional tax from the salary or wages of the employees who are liable to pay the tax. The amount of tax to be deducted depends on the employee’s salary or wages and the professional tax rate applicable in the state.
Payment: The amount of professional tax deducted must be paid to the state government within the prescribed due date. The due date for payment varies from state to state and can be monthly, quarterly, or annually. The tax can be paid online through the state’s official website or through designated banks.
Filing of returns: The employer is required to file periodic returns with the state tax department showing the details of professional tax deducted and paid. The frequency of filing returns also varies from state to state and can be monthly, quarterly, or annually.
Due Dates and Penalties OF PROFESSIONAL TAX:
The due dates for payment and filing of returns for professional tax vary from state to state. Some states require monthly payments and returns, while others require quarterly or annual payments and returns. It is important to check the rules and regulations in the respective state to ensure compliance with the due dates.
In case of delayed payment or non-payment of professional tax, penalties may be levied. The penalty amount also varies from state to state and can be a fixed amount or a percentage of the tax due. In some cases, interest may also be charged on the tax due and penalties levied.
Here are some examples of penalties for non-compliance with professional tax regulations in different states:
Maharashtra: If the professional tax is not paid within the due date, a penalty of 10% of the tax amount due can be levied. In case of delay in filing the returns, a penalty of Rs. 300 per day of delay may be imposed, subject to a maximum of Rs. 5,000.
Karnataka: If the professional tax is not paid within the due date, a penalty of 2% per month of the tax amount due can be levied, subject to a maximum of 50% of the tax amount. In case of delay in filing the returns, a penalty of Rs. 100 per day of delay may be imposed, subject to a maximum of Rs. 5,000.
Tamil Nadu: If the professional tax is not paid within the due date, a penalty of 1.25% per month of the tax amount due can be levied, subject to a maximum of 30% of the tax amount. In case of delay in filing the returns, a penalty of Rs. 100 per day of delay may be imposed, subject to a maximum of Rs. 5,000.
DOCUMENTS REQUIRED FOR PROFESSIONAL TAX
PAN card of the employer or the business entity
Certificate of incorporation or registration of the business entity
List of employees with their names, addresses, and salary details
Address proof of the business premises
Identity proof and address proof of the authorized signatory
Bank statement or canceled cheque of the business entity
Copy of the latest income tax return filed by the business entity
Copy of the GST registration certificate (if applicable)
Proof of payment of professional tax (in case of renewal of registration)
Copy of the audited financial statements of the business entity (in some states)
REGISTARTION PROCESS OF PROFESSIONAL TAX
The registration process for professional tax may vary depending on the state in which the business or profession is located. However, here is a general overview of the registration process:
Determine the applicability: The first step is to determine whether the business or profession is liable to pay professional tax as per the state’s regulations.
Obtain registration form: The registration form for professional tax can be obtained from the local municipal corporation or state tax department website.
Fill the form: The registration form should be filled accurately with all the required details such as the name of the business or profession, address of the business, nature of the business or profession, number of employees, salary details of the employees, and other relevant information.
Submit the form: Once the form is filled, it should be submitted along with the necessary documents and fees to the local municipal corporation or state tax department.
Verification: The authorities will verify the information provided in the registration form and documents submitted. If any discrepancies are found, the applicant will be given an opportunity to rectify them.
Issue of registration certificate: Upon successful verification, the authorities will issue a registration certificate for professional tax.
Payment of tax: The business or profession should make payment of professional tax as per the applicable rates and timelines.
Professional Tax Registration FAQ’s
1. What is professional tax?
Professional tax is a tax levied by state governments in India on salaried employees, professionals, and business owners engaged in certain trades or professions.
2. Who is liable to pay professional tax?
The liability to pay professional tax varies from state to state, but generally, salaried employees, professionals, and business owners engaged in certain trades or professions are liable to pay professional tax.
3. How is professional tax calculated?
Professional tax is calculated based on the income or salary earned by the individual or the business, and the applicable rates of professional tax in the respective state.
4. What are the professional tax rates in India?
The professional tax rates in India vary from state to state, and the rates may also differ based on the income or salary of the individual. Here is a table of professional tax rates in some states:
| State | Monthly Salary or Income | Professional Tax Rate |
|---|---|---|
| Maharashtra | More than Rs. 7,500 | Up to Rs. 2,500 |
| Karnataka | More than Rs. 15,000 | Up to Rs. 2,500 |
| Telangana | More than Rs. 15,000 | Up to Rs. 2,500 |
| Andhra Pradesh | More than Rs. 15,000 | Up to Rs. 2,500 |
| Tamil Nadu | More than Rs. 21,000 | Up to Rs. 2,500 |
| Gujarat | More than Rs. 8,333 | Up to Rs. 2,500 |
5. What are the due dates and penalties for professional tax?
The due dates and penalties for professional tax vary from state to state. Generally, professional tax is required to be paid annually or bi-annually, and a penalty may be levied for delayed payment or non-compliance.
6. What are the documents required for professional tax?
The documents required for professional tax registration and compliance may vary depending on the state and the type of business or profession. However, some of the common documents required are PAN card, certificate of incorporation or registration, list of employees, address proof, identity proof and address proof of the authorized signatory, bank statement, and copy of the latest income tax return filed.
7. What is the registration process for professional tax?
The registration process for professional tax may vary depending on the state in which the business or profession is located. However, the general process involves obtaining the registration form, filling the form with accurate details, submitting the form along with necessary documents and fees, verification by the authorities, issuance of registration certificate, and payment of professional tax as per the applicable rates and timelines.
8.Who has to pay professional tax in India? Answer: Every person engaged in any profession, trade, calling, or employment falls under one or the other class mentioned in the Schedule I of the Professional Tax Act is liable to pay professional tax.
Who is assessed under the Professional Tax Act? Answer: The employer is responsible for paying the professional tax assessed under the Professional Tax Act.
What is the penalty for violating Professional Tax regulations? Answer: The penalty for not registering for professional tax or not paying it within the due date varies from state to state. Generally, a penalty of Rs. 5 per day is levied for non-registration, and a penalty of 10% is charged for paying after the due date.
Who is required to obtain a Certificate of Registration (RC)? Answer: Every employer liable to pay profession tax on behalf of his employees, for whom he pays salary/wages within the taxable limit, is responsible for obtaining a Certificate of Registration.
Is there Professional Tax in Union Territories? Answer: No, there is no Professional Tax in Union Territories of India.
Who are exempt from Professional Tax in India? Answer: There are several exemptions for individuals to pay Professional Tax, including parents of children with permanent disability, members of the forces, badli workers in the textile industry, individuals suffering from a permanent physical disability, women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings, parents or guardians of individuals with mental disability, and individuals above 65 years of age.
What is the maximum amount of Professional Tax levied by a state? Answer: The maximum amount of professional tax that any state can levy is Rs. 2500.
What is the due date for payment of Professional Tax? Answer: If the entity has enrolled before 31st May, the due date for payment is 30th June. In case of enrolments made after 31st May, the due date for payment is 30 days before the enrolment date.