Professional Tax Registration
Professional Tax Compliance, Easily and Fast with VenueTax | Kolhapur
Professional Tax Registration
Profession tax the tax by the state governments in India. A person earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this professional tax. Different states have different rates and methods of collection. In India, profession tax is imposed every month. However, not all states impose this tax. The states which impose professional tax are Punjab, Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh,jharkhand and Sikkim. Business owners, working individuals, merchants and people carrying out various occupations come under the purview of this tax.
Profession tax is levied by particular Municipal Corporations and majority of the Indian states impose this duty. It is a source of revenue for the government. The maximum amount payable per year is INR 2,500 and in line with tax payer’s salary, there are predetermined slabs.[1] It is also payable by members of staff employed in private companies. It is deducted by the employer every month and sent to the Municipal Corporation. It is mandatory to pay professional tax. The tax payer is eligible for income tax deduction for this payment.[2]
Applicability of Profession Tax as per the Constitution of India: Article 276 of the Constitution of India provides that “there shall be levied and collected a tax on professions, trades, callings and employments, in accordance with the provisions of this Act. Every person engaged in any profession, trade, calling or employment and falling under one or the other of the classes mentioned in the second column of the Schedule shall be liable to pay to the State Government tax at the rate mentioned against the class of such persons in the third column of the said Schedule. Provided that entry 23 in the Schedule shall apply only to such classes of persons as may be specified by the State Government by notification from time to time.”
Registration is mandatory within 30 days of employing staff in a business or, in the case of professionals, 30 days from the start of the practice. This tax needs to be deducted from the salary or wages paid; In Maharashtra, profession tax is governed by the Maharashtra State Tax on Professions, Trades, Calling and Employment Act, 1975. All employees and professionals with a monthly salary of over Rs. 7500 must pay profession tax. Those with a salary of Rs. 7500 to Rs. 10,000 must pay Rs. 175 per month, while those with a higher salary must pay Rs. 200 a month (Rs. 300 in February). Payment of the profession tax that is collected can now be made online.
Other Things to Know
If you have employees in more than one state, you would need to get a Profession Tax Registration in each state. Even the rate at which it must be paid will vary. This makes it cumbersome for many small businesses to comply with. Do note, however, that many north Indian states do not levy Profession Tax at all.
The frequency of return filing depends on the state you’re in. For example, in Maharashtra, returns can be filed annually if the liability is under Rs. 5000, quarterly if the liability is under Rs. 20,000 and monthly if it is above Rs. 20,000. However, in West Bengal, returns need only be filed once every year. This is the approach, in fact, many states are moving toward now.
A penalty of 10% of the amount owed can be imposed in Maharashtra in case of delayed payment of Profession Tax. A delay in obtaining the Enrollment Certificate will be charged at Rs. 2 per day.
Professional Tax Registration
- About This Package
Profession tax the tax by the state governments in India. A person earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this professional tax. Different states have different rates and methods of collection. In India, profession tax is imposed every month. However, not all states impose this tax. The states which impose professional tax are Punjab, Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh,jharkhand and Sikkim. Business owners, working individuals, merchants and people carrying out various occupations come under the purview of this tax. Registration is mandatory within 30 days of employing staff in a business or, in the case of professionals, 30 days from the start of the practice. This tax needs to be deducted from the salary or wages paid; In Maharashtra, profession tax is governed by the Maharashtra State Tax on Professions, Trades, Calling and Employment Act, 1975. VenueTax can help you to register for professional tax.
- Steps Involved
- Document Submission
- Application for Professional Tax Registration
- Follow-up
- PT Registration Certificate Issue
- Compliance Basic Knowlegde
- Documents Required
- Address proof of establishment
- Address proof of partners, proprietor or directors as applicable
- PAN of partners, proprietors and directors as applicable
- Photo of partners, proprietors and directors as applicable
- Salary details of employees
- Financial statements of the establishment
- Certificate of incorporation and address proof in case of company
- General FAQ's
Professional tax is a state level tax which is imposed on income earned by way of profession, trade, calling or employment. The tax is based on slabs depending upon income of individual who may be self employed or working as employee of an entity.
Every employer in specific states is required to deduct taxes from salary when paid to one or more employees when payment made exceeds Rs 5000(this limit is for Maharashtra) and deposit with state government. That entity is required to obtain registration certificate. When person is employed in profession by two or more employers and is getting salary/wages exceeding Rs. 5000 but employer is not deducting professional tax then the individual needs to get enrolment certificate from authority.
In case of individuals who are self employed the tax has to be paid by the individual himself In case of employed individuals, the liability is on the employer
