Features
- Lightning-Fast Service
- Competitive Pricing
- Skilled And Experienced Team
- Real-Time Service Tracking
Professional Tax Registration
Professional Tax Registration For Employer
Professional Tax Registration and Compliance
- Professional tax is a direct tax levied on individuals who earn income through professions, occupations, callings, or trades.
- In India, professional tax is collected by the state or union territory governments, not the Central Government.
- For salaried and wage earners, employers deduct the professional tax from their salaries and deposit it with the state government.
- Individuals who are not salaried or wage earners are responsible for paying this tax directly.
- The calculation and amount of professional tax collected vary by state, but there is a maximum annual limit of Rs. 2500.
Professional Tax Applicability
- Professional tax is applicable to various entities engaged in professions, trades, or occupations.
- It applies to individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies, associations of persons, or any group of individuals, whether incorporated or not.
- Professionals earning income through salaries or other means, including lawyers, teachers, doctors, and chartered accountants, are required to pay professional tax.
Professional Tax Applicable States across India
Please refer to the following table to know more about the states which impose professional tax in India:
| Applicable States | Non-Applicable States |
|---|---|
| Andhra Pradesh | Central |
| Assam | Andaman and Nicobar Islands |
| Bihar | Arunachal Pradesh |
| Gujarat | Chandigarh |
| Jharkhand | Chhattisgarh |
| Karnataka | Dadra and Nagar Haveli |
| Kerala | Daman and Diu |
| Madhya Pradesh | Delhi |
| Maharashtra | Goa |
| Manipur | Haryana |
| Meghalaya | Himachal Pradesh |
| Mizoram | Jammu and Kashmir |
| Nagaland | Ladakh |
| Odisha | Lakshadweep |
| Pondicherry | Rajasthan |
| Punjab | Uttar Pradesh |
| Sikkim | Uttarakhand |
| Tamil Nadu | |
| Telangana | |
| Tripura | |
| West Bengal |
Professional Tax Rate
- The maximum annual professional tax payable is INR 2,500.
- Professional taxes are typically calculated based on tax slabs according to the individual’s gross income.
- This tax is deducted monthly from the individual’s income.
- The Commercial Taxes Department of each state or union territory collects professional taxes based on established tax slabs.
- Tax rates vary by state or union territory.
- The tax amount is determined by the individual’s annual taxable income and can be paid annually or monthly.
Who Pays Profession Tax?
- For salaried and wage-earning individuals, the employer deducts the professional tax from their salary or wages and submits it to the state government.
- Self-employed individuals who run their own profession or trade must directly pay the professional tax to the state government.
Employer’s Responsibility for Professional Tax
- Business owners are accountable for deducting professional tax from their employees’ salaries.
- They must then submit the deducted amount to the relevant government department.
- Owners are required to file a return to the tax department within the specified timeframe and using the prescribed form.
- The return should include proof of tax payment.
- If payment proof is not provided, the return may be considered incomplete and invalid by the authorities.
Exemptions for Payment of Professional Tax
- Some individuals are exempt from paying professional tax as per the Professional Tax Rules.
- Exempt individuals include parents of children with permanent disabilities or mental disabilities.
- Members of specified forces under the Army, Air Force, and Navy Acts, including reservists serving in the state, are also exempt.
- Badli workers in the textile industry are exempt, as are individuals with permanent physical disabilities, including blindness.
- Women working solely as agents for the Mahila Pradhan Kshetriya Bachat Yojana or as Directors of Small Savings are exempt.
- Parents or guardians of individuals with mental disabilities are exempt, along with individuals above the age of 65.
Professional Tax Registration and Compliance
- Professional Tax Registration is mandatory within 30 days of hiring employees or commencing professional practice.
- The application for the Registration Certificate must be submitted to the relevant state tax agency within this timeframe.
- If the individual or business has multiple workplaces, separate applications should be filed with each authority governing the respective workplace.
Due Dates for Professional Tax Payment
If an employer employs more than 20 employees, he must make the payment within 15 days of the end of the month. However, if an employer has fewer than 20 employees, he must pay quarterly (by the 15th of the next month after the end of the quarter).
Professional Tax Return
The Professional Tax Return must be filed by all persons with Professional Tax Registration, and the due dates vary by state.
Benefits of Professional Tax Registration
- Professional tax registration ensures easy compliance with tax regulations, facilitating a smooth registration process with minimal hurdles.
- Timely payment of professional tax helps avoid penalties and legal consequences, ensuring adherence to the law.
- Compliance with professional tax regulations is straightforward, simplifying the registration process for employers and self-employed individuals.
- Professional tax serves as a significant revenue source for state governments, enabling them to fund various welfare and development projects.
- Employers and self-employed individuals may claim deductions for previously paid professional taxes, providing financial benefits.
Documents required for Professional Tax Registration
- Certificate of Incorporation or LLP Agreement
- Memorandum of Association (MOA) and Articles of Association (AOA)
- PAN Card of the Company, LLP, Proprietor, Owner, or Director
- No Objection Certificate (NOC) from the landlord where the business is located
- Passport size photos of the Proprietor, Owner, or Director
- Address and identity proof of the Proprietor, Owner, or Director
- Details of employees and their salaries
- Any additional registrations and licenses required
Procedure for Professional Tax Registration
- Professional Tax Registration procedures vary by state, with different filing requirements and periodic returns.
- Applicants must complete the application form and gather necessary documents.
- The application, along with documents, should be submitted to the relevant state government and a copy sent to the tax department.
- The tax authority reviews the application to verify the accuracy of the information provided.
- Once all documents are properly reviewed, the authority issues the Registration Certificate.
Penalties Related To Professional Tax Registration
- Countries implementing professional tax policies may impose penalties for failure to register.
- The exact penalty amount is determined by state regulatory laws.
- Penalties are also applicable for late submission of Professional Tax (PT) returns or delayed payments, varying based on state legislation.
- Businesses failing to register, pay taxes on time, or submit returns may face fines, late fees, or legal consequences, including potential imprisonment.
- Further penalties are imposed for failure to make payments or file returns by the due date, as per state regulations. For instance, Maharashtra government levies penalties for late filing or non-payment of professional tax in Maharashtra.
| Nature of default | Penalty Leviable |
|---|---|
| Not obtaining PT registration | Rs.5/- per day |
| Late filing of PT return | Rs.1,000/- |
| Late payment of PT dues | Interest @1.25% p.m. Penalty @10% |
- For instance, if a professional tax payment of Rs. 1 lakh is delayed by 12 months, the simple interest payable is Rs. 1,250, along with a penalty of Rs. 10,000. This totals to Rs. 11,250.
- The maximum penalty for a one-year delay in payment and return filing of Rs. 1 lakh is Rs. 12,250.
Seamless Professional Tax Registration Services with Filing Champs
- Expert Guidance: Filing Champs offers experienced assistance throughout the Professional Tax Registration process, ensuring compliance with current regulations.
- Document Preparation: We assist in organizing essential documents required for registration, ensuring readiness for the process.
- Application Submission: Filing Champs handles the submission of your registration application to relevant authorities, ensuring accuracy and compliance.
- Timely Processing: Our efficient handling ensures prompt processing of your application, minimizing wait times for registration.
- Customized Support: We provide personalized assistance tailored to your specific business or professional needs.
- Compliance Assurance: Filing Champs ensures that your registration aligns with all applicable tax laws and regulations.
- Customer Support: Our customer support team is available to address any queries or concerns you may have during the registration process.
- Simplified Procedure: Choosing Filing Champs simplifies the registration process, allowing you to navigate tax legislation with confidence.
Professional Tax Registration
Professional Tax in India is calculated based on salary slabs, varying by state, with a maximum limit of Rs. 2500 per year.
Professional Tax is deducted by the employer before calculating income tax and deposited with the State Government.
Yes, it is mandatory for every individual, with penalties for non-compliance.
Professional Tax rules vary by state, allowing each state to set its own limits and rates within the maximum limit of Rs. 2500 per year.
It is a state-level tax imposed on income earned through professions, trades, callings, or employment, based on individual payment slabs.
Employers deduct and deposit professional tax for employees, while self-employed individuals are responsible for paying it themselves.
Anyone engaged in a profession, trade, calling, or employment is liable to pay professional tax.
Certain individuals, such as parents of disabled children, members of specified forces, and those above 65 years of age, are exempt.
The maximum is Rs. 2500 per year, set by state regulations.
