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professional tax registration
professional tax registration

Online Professional Paid Tax Registration

WHAT IS PROFESSIONAL TAX?


Professional Tax Registration is a tax imposed by the State government. Professional tax is imposed on income earned in any trade or profession and is usually paid by the employer. The total professional tax payable with reference to any one person to the State or to any local authority in the State by way of taxes imposed on professions, trades, callings and employments should not exceed rupees two hundred fifty and two thousand five hundred rupees per annum.

It is a type of tax imposed on all professions, trades and employment and levied based on the income of such profession, trade and employment. It is imposed on employees, a person carrying on business including freelancers, professional etc. subject to income exceeding the monetary threshold. State government are entitle to make laws with respect to professional tax though being tax on income under Article 276 of the constitution of India which deals with tax on professions, trades, callings and employment. Professional tax is a deductible amount for the purpose of Income-tax Act, 1961 and can be deducted from taxable income.

Professional tax is a state government tax imposed on anyone who makes money from any profession, trade, or job. In other words, a direct tax that is deducted from your gross salary by your employer.Professional tax is collected by the Commercial Tax Department. The commercial tax department of the respective states collects it which eventually reaches the fund of Municipality Corporation. The professional tax is a source of revenue for the State Government which helps the state govt. in implementing schemes for the welfare and development of their respective region.

WHO ARE RESPONSIBLE TO PAY PROFESSIONAL TAX?


In case of employees, an employer is responsible to deduct and pay professional tax to the State Government on behalf of his employees subject to the monetary threshold if any provided by respective state’s regulations, employer (corporate, partnership firms, sole proprietorship etc) also being a person carrying on trade or profession is also required to pay professional tax on his trade or profession again subject to the monetary threshold if any provided by respective State’s regulations.

PROFESSIONAL TAX RATE


The maximum amount due per annum towards professional tax is INR 2,500. The professional paid tax registration is charged based on income slabs rate on the gross income of the professional. It is to be deducted from his income every month. In case of Salaried and Wage-earners, the Professional Tax is liable to be deducted by the Employer at the time of payment from the Salary or Wages, and the Employer is liable to deposit the same with the state government. In case of other class of Individuals, the very person is liable to be pay it himself.

EXEMPTED PERSONS FROM PAYING PROFESSIONAL TAX


Foreign employees are exempt from paying profession tax.

Indian employees employed by the Foreign office and consultant are exempted from taking the certificate of registration.

WHAT IS PROFESSIONAL TAX CERTIFICATE?


There are two types Professional tax certificates available:

  • PTEC (Professional Tax Enrollment Certificate):

      Professional tax enrolments certificate: This is the tax that persons deduct from their salary and govt. Who are paid who have a particular designation like: company owner, directors, CA, Doctors, lawyers, proprietor etc This is paid by the business organizations, owner or professionals i.e. Private Limited Company or Public Limited Company, Sole Proprietor, Director Etc.

  • PTRC: (Professional Tax Registration Certificate):

      Government or Non- Government employers who Deduct the tax from the employee’s wages and deposit the same to the government.

      Professional tax is applicable once the person starts his profession or business within 30 days of starting the profession. In case the company has its business in more than one places, then it is required to take registration for each such place.

WHAT IS THE APPLICABILITY OF PROFESSION TAX?

  • Company, Firms and LLP:

      Company, firms, LLP, Corporation, societies, HUF, Associations and clubs are taxable entity.

  • Professionals(Individuals):

      Legal Practitioners like management consultants, tax consultants, surveyors, CS, CA, Insurance agents, engineers and other professionals like solicitors, Notaries, medical representatives like dentist, medical consultants, doctors, architects and contractors are all considered as professional individuals who is liable to pay professional tax.

DOCUMENTS REQUIRED FOR PROFESSIONAL TAX REGISTRATION

  1. Acknowledgement of the online form, also the hard copy of the e-form submitted

  2. PAN Card of the applicant

  3. Address proof of Partner, Director, and Proprietor

  4. Certificate of Incorporation of an organization

  5. Address proof of registered place of business

  6. Blank Cancelled Cheque with organizations name preprinted on it

  7. Establishment Certificate

  8. PAN& PTEC details of the applicant

PROFESSIONAL TAX REGISTRATION PROCESS


The professional tax registration process varies state to state, the tax slab rates can vary from one state to another. If the business owner has employees under different states, then one has to get a professional tax registration for all the states.

The number of returns which one needs to file will depend on the state the person have his work place in. before filing a return it’s important to know the rules and regulations of the respective states.

You can get registered as a payee of professional tax in a local professional tax office at that specified state.

It is essential for all the individuals and businesses that are liable for the tax payment.

Calculate the amount need to pay for professional tax in the prescription form. The payment and calculations done should be audited by the chartered Accountant.

In case of employment, the employer has to deduct the professional tax from the salary of employees at the time of payment made to employees.

Once the person gets registered under professional tax, then he is liable to pay Professional Tax within the given time; different professions are specified with different PT rates.

What happens due to dates?
Since we have just taken the example of West Bengal, we are now talking about this state. The rules of professional taxes, taxes amount and even websites are also different in each state. That is, the due date of professional taxes of West Bengal is 31st July of every financial year.
What happen if we not filled monthly professional taxes and professional taxes return?
If we do not pay monthly professional taxes and professional taxes return eligibility date within 90 days then we have to pay interest at the monthly rate of 1% on late fees.
In which state professional taxes will be applicable?
Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, Jharkhand and Sikkim, Mizoram
In which state professional taxes will not be applicable?
Delhi, Haryana, Uttar Pradesh and Uttarakhand, I would like to tell you one more thing as in the beginning I told you that every state has its own rules and among them Maharashtra is the only one where the income of women per month is Rs 10,000/-. - Women who are called 'Soni' do not have to pay any professional tax of any kind.
Maximum amount of professional tax?
According to the Income Tax Act, no state can levy professional taxes more than Rs 2500/-. It means your professional taxes are deducted every month 208.33 /- per month.
Who is exempt from professional tax in West Bengal?
Members of the Indian Navy, Air Force and Army in West Bengal do not have to pay any professional tax to the state government.

RESPONSIBLE PERSON FOR DEDUCTING PROFESSIONAL TAX


An employer is responsible for deducting the professional tax from the salaries of his employees and deposit the collected amount to the local government authorities, also he need to file a return to the respective department in a prescribed form with proof of tax payment within certain period of time.

Employer (Corporate, sole Proprietorship, Private Limited) is also liable to pay the tax imposed on his trade or business.