An overview of Professional Tax
The Professional Tax is a direct tax levied on individuals who earn income through employment, trade, or calling. In contrast to Income Tax, which is levied by the Central Government in India, the Professional Tax is levied by the State Government or Union Territory. In spite of this, not all states in India impose the Professional Tax; here is a list:
It is required to register for professional tax within 30 days of starting the practice or employing staff. The rate of Professional Tax varies from state to state, but the maximum amount levied as this tax is INR 2,500 per year. Consequently, some states tend to charge Professional Tax as a percentage value, while others tend to charge it as a fixed amount according to income slabs. Employees must be compensated or paid wages after paying such tax.
The professional registration process for tax professionals
Documents can be mailed to us
PT Registration documents can be sent to us over e-mail. We will provide you with a list of documents for signing and instructions on how to do so
Preparation of Profession Tax Applications
Using our Professional Tax Expert, you will receive an assessment of your business and prepare the documentation for filing a professional tax application with the State.
Filling out an application
Experts with experience in A N Bhutada in the same city or town submit signed professional tax applications to the relevant department.
Approval of the registration
We will follow up with the professional tax department for the registration of the PT application. The PT application is scrutinized by the Government department.
Does Professional Tax have to be paid by anyone?
Professional Tax is collected by the Commercial Tax Department and then deposited with the Municipality Corporation of the respective state.
Employees who are salaried must be deducted and paid Professional Tax according to the State’s legislation.
A person carrying out a trade or profession, whether through a corporation, sole proprietorship, or partnership firm, is also liable to pay Professional Tax on his trade/profession, according to the laws of the state.
For employers, professionals, or traders to pay taxes, they need to obtain the Professional Tax Registration Certificate. Employers must also register separately for each office based on the legislation of the state in which they operate. Employers can deduct the tax from employee salaries with the Professional Tax Payment Certificate. Professional Tax is also required for freelancing professionals.
India’s professional tax registration benefits
Several states have made it mandatory for employers to obtain Professional Tax Certificates in order to deduct and pay service tax. There are several benefits included, including:
- Employees who have paid Professional Tax can claim deductions under Section 16 of the Income Tax Act, 1995. The deduction is allowed in the year the payment was made.
- Unless you enroll for Professional Tax, you may incur fines and penalties which may increase over time if you fail to do so.
- During the registration process, the legal regulations of Professional Tax are easy to comply with.
- In addition to generating revenue for the state government, professional tax is also used to implement a variety of welfare and development plans in the area.
Documents required for professional tax registration
Below is a list of the essential documents for registering for Professional Tax:
- Certificates of Incorporation, such as MOAs, AOAs, and LLP agreements
- (Attested by the company’s director) PAN card
- A copy of the bank statement and a canceled check for the Company’s bank account
- An official certificate of registration and a letter of authorization from the property owner is required
- The Board’s Resolution or the Partner’s Declaration of Consent
- Each director must sign a passport size photo, PAN card, and address proof
- Attendance and salary register
- Certificate of Shop and Establishment
Frequently Asked Questions
The Professional Tax Registration shall be obtained by whom?
Obtaining registration is the responsibility of the business owner or professional. As per the professional tax slab, business owners/employers are required to deduct professional tax from employee salaries and pay the same to the Government by the 15th day of each month or quarter, depending on the tax slab.
How does an enrolment certificate work?
In addition to the Professional Tax Enrolment Certificate (PTEC), employers must obtain this registration in order to pay taxes.
Why is it important to have a registration certificate?
It is the employer’s responsibility to obtain the registration when the employee is employed. This registration enables the employee to deduct the professional tax from their salaries. The registration should be obtained within the first 30 days of employment.
What states are subject to professional tax?
The following states have imposed professional taxes payment online
There are six states in Punjab – Bihar, Karnataka, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Sikkim, Kerala, Meghalaya, Orissa, Tripura, and Madhya Pradesh.