Professional Tax Registration
Professional Tax Registration
- Package NameBasic
- Package Price₹ 10000
- Total GST₹ 0
Overview of Professional Tax Registration
Professional Tax registration is required for employers and individuals engaged in a profession or trade. It is a tax levied by the state on the income earned by employees on rendering their specific services.
The ‘Professional tax’ is a tax that is levied on all kinds of professions, trades, and employment, and its applicability is based on the income of such-
- Profession,
- Trade, and
- Employment.
Professional tax is levied by the State Government and it varies from state to state. To govern the professional tax of the particular state, every state has its laws and regulations. However, all the states do follow a slab system based on the income to levy professional tax. Further, Individuals carrying on freelancing business without any employees are required to obtain a Professional tax certificate subject to the pecuniary threshold if any, provided by the respective State Authorities.
There are two types of Professional tax certificates: -
PTEC (Professional Tax Enrolment Certificate):
This is paid by the business entity, owner or a professional i.e. Private/ Public Limited Company, Sole Proprietor, Director Etc.
PTRC: (Professional Tax Registration Certificate):
The government or Non- Government employer deducts the tax from the employee’s wages and deposits the same to the government.
Note- A professional tax imposed is subject to the exemption provided by the respective State to particular categories.
Benefits of Professional Tax Registration
Following are some of the relevant characteristics of Registration of Professional Tax:
Below mentioned are the benefits of Professional Tax, which are as follows:-
Imposes Minimal Restriction
Professional tax is simple to comply with and the compliances relating to professional tax impose very few restrictions.
Avoid Penalty
Professional tax payment is a legal requirement and hence ignoring it can result in any penalty or prosecution. To avoid this penalty and prosecution, the self-employed person and employer pay their professional tax without any delay, as per the rates prescribed by their concerned state.
Easy Registered
Professional tax is easy to get registered with simplified annual or monthly compliances.
Implementing Welfare & Development Programs
The Professional Tax is a source of revenue for the state governments which helps in implementing schemes for the various welfare and development of the region
Can Claim Deduction
The deduction can be claimed of earlier paid professional tax on salary.
Who are Liable for Professional Tax
The Below-mentioned class of persons is liable for Professional tax. However, it depends on the state where it is applicable-
- Individual
- Public/Private/One-person Company
- Partnership
- Co-operative Society
- Association of Person
- HUF (Hindu Undivided Family)
What Documents are Required for Professional Tax Registration?
For Professional Tax registrations, below mentioned documents are required-
- Acknowledgment of the online form, along with the printout of the digital form submitted.
- In case, the applicant is Company- COI, AOA & MOA, and PAN of the company. (Attested by the Director).
- Identity proof and address proof of all directors along with the passport size photo.
- Bank account details of the Company along with a bank statement and canceled cheque.
- Proof of Registered Office. However, in the case of rented property-NOC from the owner.
- In case of a company-Board Resolution and In case of a Partnership- the Declaration of consent by the concerned Partner is required.
- Salary and attendance register.
What is the Procedure of Professional Tax Registration?
The procedure for Professional Tax registration is a State-specific query. Further, depending on the State’s requirement, Professional tax returns also need to be filed at specified intervals. Professionals/Employers seeking professional tax registration shall follow these steps:-
Step-1- Filing the Application Online
The applicant can apply online through the CTD portal of a specific state.
Step-2-Filing the form along with the Requisite Documents
The applicant shall file the form along with the requisite document.
Applying in Offline Mode
One can also apply offline by submitting the application form along with the requisite documents and prescribed fee to the concerned State Government.
Step-3-Submit Hard Copy
Once the applicant applied for registration, he/she should submit the physical copy to the concerned tax department.
Step-4- Scrutinization by the Tax Authority
On receipt of an application, the tax authority shall scrutinize it for its correctness.
Step-5- Issuance of Registration Certificate
After scrutinization, if the authority gets satisfied, it shall approve the same and issue the registration certificate to the applicant. In case the department found a flaw in the application, it can definitely raise queries that shall be responded to on time.
What Penalties are Imposed in Case of Violation of Professional Tax Regulation?
The Penalty for violation is imposed on the individuals who default in submitting their professional tax. The states that are collecting Professional tax, impose a penalty for not registering professional tax once it has become applicable. Though, the amount of penalty varies from state to state.
- Fails to Get Registration
He will be liable to a penalty for the period during which he remains unregistered.
- Fails to Deposit to the Government/ Late Deposition
He will be liable to a penalty for the period during which he remains unregistered.
- Non-Deposition of Amount
The officials have the power to recover such amount along with applicable penalty and interest from the assets of such defaulter. Moreover, they can attach his bank account also. In serious cases, prosecution cases also can be filed.
Further, states also impose penalties for failing to initiate any payment within the due date and also failing to file the return within the specified due date.
1. A penalty of Rs5/- per day is applicable on late obtaining the registration of the certificate.
2. In case of non/late payment of professional tax, the penalty will be 10% of the amount of tax. An individual is liable to pay Rs 1000 in case of late filing of returns. Also, if the delay is for more than a month, a penalty of Rs 2000 will be imposed.
Who is Accountable to Collect and Pay Professional Tax?
Professional tax is a tax that needs to be paid by every individual earning income. The calculation of the professional tax and the amount collected varies from one state to another. However, the limit has been set to Rs. 2500 per year.
The Professional tax is paid and collected at a pre-determined slab rate and is collected either annually or monthly by the Commercial Tax Department of the respective state. It is paid directly by a self-employed person engaged in a profession or trade business while in the case of salaried employees, it becomes the responsibility of the employer to pay the Professional tax to the respective State Government by deducting and depositing such tax from the employees.
State-wise Professional Tax Slab FY 21 – 22
States | Monthly Salary | Tax per Month |
|
|
|
Karnataka | Up to INR 15,000 Above INR 15,000 | NIL INR 200 |
Bihar | Up to INR 3, 00,000 From INR 3, 00,001 to INR 5, 00,000 From INR 5, 00,001 to INR 10, 00,000 Above INR 10, 00,000 | NIL INR 1,000 INR 2,000 INR 2,500 |
West Bengal, | Up to INR 8,500 From INR 8,501 to INR 10,000 From INR 10,001 to INR 15,000 From INR 15,001 to INR 25,000 From INR 25,001 to INR 40,000 Above INR 40,000 | NIL INR 90 INR 110 INR 130 INR 150 INR 200 |
Andhra Pradesh | Up to INR 15,000 From INR 15,001 to INR 20,000 Above INR 20,000 | NIL INR 150 INR 200 |
Telangana | Up to INR 15,000 From INR 15,001 to INR 20,000 Above INR 20,000 | NIL INR 150 INR 200 |
Maharashtra | Up to INR 7,500 for men Up to INR 10,000 for women From INR 7,500 to INR 10,000 INR 10,000 and above | NIL NIL INR 175 INR 200 (INR 300/- for February) |
Tamil Nadu | Up to INR 21,000 From INR 21,001 to INR 30,000 From INR 30,001 to INR 45,000 From INR 45,001 to INR 60,000 From INR 60,001 to INR 75,000 Above INR 75,000 | NIL INR 100 INR 235 INR 510 INR 760 INR 1095 |
Gujarat | Up to INR 5,999 From INR 6,000 to INR 8,999 From INR 9,000 to INR 11,999 INR 12,000 and Above | NIL INR 80 INR 150 INR 200
|
Assam, | Up to INR 10,000 From INR 10,001 to INR 15,000 From INR 15,001 to INR 25,000 Above INR 25,000 | NIL INR 150 INR 180 INR 208, INR 212 for the month of February |
Kerala | Up to INR 1,999 From INR 2,000 to INR 2,999 From INR 3,000 to INR 4,999 From INR 5,000 to INR 7,499 From INR 7,500 to INR 9,999 From INR 10,000 to INR 12,499 From INR 12,500 to INR 16,666 From INR 16,667to INR 20,833 Above INR 20,834 | NIL INR 20 INR 30 INR 50 INR 75 INR 100 INR 125 INR 166 INR 208/- (INR 212 for the month of February) |
Meghalaya, | Up to INR 4,166 From INR 4,167 to INR 6,250 From INR 6,251 to INR 8,333 From INR 8,334to INR 12,500 From INR 12,501 to INR 16,666 From INR 16,667 to INR 20,833 From INR 20,834 to INR 25,000 From INR 25,001 to INR 29,166 From INR 29,167 to INR 33,333 From INR 33,334 to INR 37,500 From INR 37,501 to INR 41,666 Above INR 41,666 | NIL INR 16.50 INR 25 INR 41.50 INR 62.50 INR 83.33 INR 104.16 INR 125 INR 150 INR 175 INR 200 INR 208- INR 212 for February). |
Odisha, | Up to INR 5,000 From INR 5,001 to INR 6,000 From INR 6,001 to INR 8,000 From INR 8,001 to INR 10,000 From INR 10,001 to INR 15,000 From INR 15,001 to INR 20,000 Above INR 20,000 | NIL INR 30 INR 50 INR 75 INR 100 INR 150 INR 200 |
Tripura, | Up to INR 5,000 From INR 5,001 to INR 7,000 From INR 7,001 to INR 9,000 From INR 9,001 to INR 12,000 From INR 12,001 to INR 15,000 Above INR 15,000 to INR 208 | NIL INR 70 INR 120 INR 140 INR 190 (INR 212 for the month of February) |
Madhya Pradesh, | Up to INR 1,50,000 From INR 1,50,001 to INR 1,80,000 Above INR 1,80,000 | NIL INR 125 INR 212 |
Sikkim | Up to INR 20,000 From INR 20,001 to INR 30,000 From INR 30,001 to INR 40,000 Above INR 40,000 | NIL INR 125 INR INR 200 |
Chhattisgarh | Up to INR 1,50,000 From INR 1,50,001 to INR 2,00,000 From INR 2,00,000 to INR 2,50,000 From INR 2,50,001 to INR 3,00,000 Above INR 3,00,000 | NIL INR 150 INR 180 INR 190 INR 200 |
Compliance For India Procedure for Professional Tax Registration
Kindly utilize the steps given above to integrate legally and securely a Professional Tax registration and get the benefits in the form of better-quality professional sales and satisfied clients.
It is advisable that an attorney with “Tax Registration experience” must be appointed to overwhelm many of the potential pitfalls that creep around within Professional Tax registration and to understand the requirement in detail. The elementary information would be mandatory from your end to start the process. The Attorney will begin working on your request once all the information is provided, and the payment is received.
General F.A.Q.
Yes, if an individual is a salaried person, he/she must pay professional tax.
A professional tax is a tax levied by the state government that differs from one state to another. Every state declares its own slab rate, and the professional tax is deducted based on the slabs decided by the authority.
The maximum amount of professional tax levied by a state is Rs. 2,500.
- In the case of self-employed individuals, the tax has to be paid by the individual himself.
- In the case of employed individuals, the liability to pay the tax is on the employer.
No, Professional tax is imposed only in the following states: -
- Karnataka,
- Bihar,
- West Bengal,
- Andhra Pradesh,
- Telangana,
- Maharashtra,
- Tamil Nadu,
- Gujarat,
- Assam,
- Kerala,
- Meghalaya,
- Odisha,
- Tripura,
- Madhya Pradesh, and
- Sikkim
- Chhattisgarh
Yes, Professional Tax is applicable even for freelance professionals if income exceeds the specified limit as per the Professional Tax Laws applicable in the state where the freelancer resides.
An employer who deducts the tax from the salary of the employee and pays to the government, such entity shall obtain registration certificate while employer if not deduct professional tax then the individual shall get enrolment certificate from necessary authority.
The Certain state allows the concept of a composition scheme under which any individual liable to make payment to the state government may make a lump sum payment in advance of Rs. 10,000(at a rate of Rs. 2500 *4).
The liability will arise on the date on which the employer disburses salary to any of his employees in the taxable limit for the first time.
Not all States and Union Territories charge Professional Tax. The state where Professional tax is not applicable are-
State
- Arunachal Pradesh
- Haryana
- Himachal Pradesh
- Jammu & Kashmir
- Punjab
- Rajasthan
- Nagaland
- Uttaranchal
- Uttar Pradesh
Union Territories
- Andaman & Nicobar
- Chandigarh
- Delhi
- Pondicherry
- Dadra & Nagar Haveli
- Lakshadweep
- Daman & Diu
Income tax is a direct tax collected by the central government from all taxpayers. It is charged on a certain percentage of their income. Whereas, professional tax is an indirect tax collected by the state government. It is charged based on a slab for people engaged in business, occupation, or employment.
Each Indian state prescribes its slab for professional tax. For example: In Maharashtra, if your monthly income is between ?7,500 to ?10,000, then the professional tax levied is ?175. Similarly, for monthly incomes above ?10,001, the tax levied is ?200 for 11 months and ?300 on the 12th month. Finally, when the monthly salary is less than ?7500, there is no professional tax imposed.
Employers in some states are required to deduct and deposit taxes from employees whose pay exceeds the minimum slab limit. That entity must get a registration certificate as well as an enrollment certificate.
Once the payment has been made, download the payment acknowledgement receipt. The receipt indicates that the payment has been made successfully.
One may apply directly for a professional tax registration certificate through the official website of their state. However, it is recommended that you get professional help for the first time.
The professional tax appears at the top of the salary slip as it is deducted even before calculating income tax. The employer deducts it from the salary of the employee and deposits it with the state government. Professional tax is calculated on the earned gross based on the tax levied by the statement government in the respective states.
The professional tax rules vary from state to state. As the rules vary from state to state, each state can set limits and rates. But the maximum amount limit has been developed to ?2500 per year. The salary slab structures for levying professional tax differ from state to state.
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