Professional Tax Registration

This tax is levied on all kinds of professions, trades, and employment. Profession tax is applicable to the following classes of persons:

• An Individual

• A Hindu Undivided Family (HUF)

• A Company/Firm/Co-operative Society/Association of persons or a body of individuals, whether incorporated or not

The professionals earning an income from salary or other practices such as a lawyer, teachers, doctors, chartered accountants, etc. are required to pay professional tax.

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

The maximum amount payable per annum towards professional tax is INR 2,500. The professional tax is usually a slab amount based on the gross income of the professional. It is deducted from his income every month.

The Commercial Taxes Department of a state/union territory is the nodal agency that collects professional tax on the basis of predetermined tax slabs which vary for each state and union territory. The tax is calculated on the annual taxable income of the individual; however, it can be paid either annually or monthly.

In the case of Salaried and Wage-earners, the Professional Tax is liable to be deducted by the Employer from the Salary/Wages, and the Employer is liable to deposit the same with the state government.

Self-employed persons who carry out their profession or trade on their own and fall in the ambit of profession tax are liable to pay the tax themselves to the state government.

The owner of a business is responsible for deducting professional tax from the salaries of his employees and paying the amount so collected to the appropriate government department. He/she has to furnish a return to the tax department in the prescribed form within the specified time. The return should include proof of tax payment. In case of not enclosing the payment proof, the register will consider the return incomplete and invalid.

There are exemptions provided for certain individuals to pay Professional Tax under the Professional Tax Rules. The following individuals are exempted to pay Professional Tax:

• Parents of children with permanent disability or mental disability

• Members of the forces as defined in the Army Act, 1950, the Air Force Act, 1950, and the Navy Act, 1957 including members of auxiliary forces or reservists, serving in the State

• Badli workers in the textile industry

• An individual suffering from a permanent physical disability (including blindness)

• Women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings

• Parents or guardians of individuals suffering from a mental disability

• Individuals, above 65 years of age

Tax registration for professionals 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.

• Application for professional tax certificate should be made to the assessed state tax department within 30 days of employing staff for his business.

• If the assessee has more than one place of work, then the application should be made separately to each authority with respect to the place of work under the jurisdiction of that authority.

If an employer has employed more than 20 employees, he is required to make the payment within 15 days from the end of the month. However, if an employer has less than 20 employees, he is required to pay quarterly (i.e. by the 15th of next month from the end of the quarter).

The Professional Tax Return is to be filed by all the persons who are subject to professional tax and the due dates for filing of such returns vary from State to State.

The benefits of tax registration for professionals are given below.

• It is simple to comply with the Professional Tax Compliance, which results in a smooth registration process with minimum restrictions.

• It is compulsory to pay Professional tax as per the law. Hence, the timely payment of Professional tax can help avoid penalties and any punitive action against the Employer or a self-employed person.

• Professional Tax Compliance is simple, which can enable a smooth and hassle-free Registration Process.

• The Professional Tax acts as a revenue source for the state governments that helps the government to implement schemes for the various welfare and development of the region.

• The Employer or the self-employed person can claim a deduction on the previously paid professional tax.

• Certificate of Incorporation / LLP Agreement

• MOA and AOA

• PAN Card of Company/LLP/Proprietor/Owner/Director

• NOC from the landlord, where the business is situated

• Passport size photos of Proprietor/Owner/Director

• Address and identity proof of Proprietor/Owner/Director

• Details of employees and salaries paid

• Additional registrations and licenses

The process for fulfiling professional tax obligations varies by state. Additionally, filing deadlines for these taxes also differ depending on state regulations. Professionals/Employers required to pay professional taxes should follow the procedures outlined below.

• The applicant must file the application form and the requisite documents.

• The applicant needs to submit the Application with the necessary documents to the concerned state government. A copy of the same should also be submitted to the tax department.

• On receipt of an application, the tax authority shall scrutinize the application to ensure that all the information is correct.

• Issue of Professional Tax Certificate: The authority will issue the registration certificate after successfully scrutinizing all the documents.

When professional tax policy becomes applicable, all such jurisdictions may impose a penalty for failure to register Profession Tax. However, the precise amount of the Penalty will depend on state regulatory law.

There are also penalties for failing to submit the PT return by the deadline and withholding payments after they are due. Each state’s professional tax regulations determine the actual fine. Businesses that fail to register professional tax, pay taxes late, or file returns on time may face fines, late fees, or imprisonment.

Failure to make a payment by the due date and failure to file a return by the due date carries additional penalties. For example, the following information outlines the penalty amount imposed by the Maharashtra Government for late filing or failure to pay 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 example, professional tax of Rs.1 Lakh is delayed by 12 months, then the simple interest payable is Rs.1,250/- and a Penalty of Rs.10,000. Total= Rs.11,250

Maximum Penalty for delay in payment of Rs.1 Lakh for a year and return filing also delayed = 12250

PKRIDS can assist you in simplifying the process of obtaining a Professional Tax Registration Certificate in India. Here's how our services can benefit you:

• Expert Guidance: PKRIDS provides expert guidance on the Tax Registration process for professionals. Our team is well-versed in the nuances of tax regulations and can ensure that your registration complies with the latest rules.

• Application Submission: PKRIDS will handle submitting your Tax Registration application to the relevant authorities on your behalf. This ensures accuracy and compliance with all legal requirements.

• Timely Processing: With PKRIDS' professional handling, you can expect timely processing of your application, reducing waiting times and allowing you to obtain your Professional tax certificate promptly.

• Customized Support: PKRIDS understands that each business and profession has unique requirements. We offer personalized support tailored to your needs, ensuring your registration aligns perfectly with your professional status.

• Compliance Assurance: Staying updated with ever-changing tax laws and regulations is crucial. PKRIDS pays attention to the details, ensuring that your registration complies with all necessary tax laws and guidelines.

• Customer Support: Should you have any questions or concerns during the registration process, PKRIDS' customer support team is readily available to address your queries and provide timely assistance.

By choosing PKRIDS to meet your Professional Tax obligations, you can confidently simplify the process and navigate the complexities of tax regulations.

File Your Professional Taxes Efficiently with PKRIDS!

In India, Professional Tax is calculated on Salary slabs. Under minimum salary, there is no tax. The maximum amount paid as Professional Tax is Rs.2500 per year. The tax slabs differ from state to state.

Professional Tax appears at the top of the salary slip as it is deducted before calculating income tax. The employer deducts the employee's salary and deposits it with the State Government.

Professional Tax is a mandatory tax paid by every individual, and there are penalties in case of non-compliance.

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 Rs.2500 per year. The salary slab structures for levying Professional Tax differ from state to state.

The professional Tax is a state-level tax imposed on the income earned through profession, trade, calling, or employment. The Tax is based on the slab dependent on the payment of the individual who may be self-employed or working as an employee of an entity.

The professional Tax is imposed in the following states:

• Andhra Pradesh

• Assam

• Bihar

• Gujarat

• Jharkhand

• Karnataka

• Kerala

• Madhya Pradesh

• Maharashtra

• Manipur

• Meghalaya

• Mizoram

• Nagaland

• Odisha

• Pondicherry

• Punjab

• Sikkim

• Tamil Nadu

• Telangana

• Tripura

• West Bengal

In the case of self-employed individuals, the Tax has to be paid by the individual. In the case of individuals, the liability of deducting the Tax is on the employer

Every person engaged actively or otherwise in any profession, trade, callings, or employment and falls fewer than one or the other class mentioned in the second column of the Schedule I appended to the profession tax act is liable to pay the professional Tax

The employer must pay the professional Tax assessed under the profession tax act.

The penalties for not registering for Professional Tax or not paying the same within the due date every month vary as per the State in the country again. However, generally, for non-registration, a penalty of Rs. 5 per day is levied. If you pay after the due date, you are charged 10% extra on the professional tax amount as a penalty.