Professional-Tax-Registration-and-Compliance

Professional Tax Registration and Compliance

Professional Tax Registration and Compliance

Professional Tax is a tax levied by the State government. Professional tax is levied on income however earned in any trade and is usually paid by the employer. The provision detailing the stipulations attached to Provisional Tax, caps the total professional tax payable in respect of any one person to the State or to any local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed two hundred and fifty rupees two thousand and five hundred rupees per annum.

Introduction to Professional Tax

Professional tax is just like Income Tax except for the fact that Income Tax is collected by the Central Government and Professional Tax is collected by the State Government. When this tax was first introduced in India, the maximum limit on the tax to be collected was Rs. 250.

Some of the State Governments have represented that the earlier celling of two hundred and fifty rupees which was fixed in 1949, needs to be revised upwards taking into consideration the price rise and other factors. It is also pointed out that the profession tax has, at present, become almost regressive because of the ceiling since even people with high salaries have to pay this tax at only the maximum amount of two hundred and fifty rupees per annum. The upward revision of profession tax has helped the State Governments in raising additional resources.

Professional Tax Rate

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 state governments of the following states have levied professional tax – Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh. In 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. In case of other class of Individuals, this tax is liable to be paid by the person himself.

Employer’s Responsibility for Professional Tax

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 has incomplete and invalid.

Professional Tax Registration

The professional tax registration application must be to the State’s tax department within 30 days of employing staff in a business. If there is more than one place of work, file an application separately to each authority as regards the place of work coming under the jurisdiction of that authority

Delay in obtaining Professional Tax Registration Certificate incurs a penalty of Rs. 5/- per day. In case of late or non-payment of profession tax, the penalty will be 10% of the amount of tax. In case of late filing of returns, it imposes a penalty of Rs. 300 per return.

 

To obtain Professional Tax Registration, visit IndiaFilings.com

Other Related Guides

Maharashtra Professional Tax Maharashtra Professional Tax Professional tax is a State Government tax levied on professionals and members of certain trades. In Maharashtra, the le...
PTEC-PTRC Combined Payment in Maharashtra PTEC-PTRC Combined Payment in Maharashtra To make the payment of Maharashtra Professional Tax, every taxpayer has to obtain a certificate of registra...

Post by IndiaFilings

IndiaFilings.com is committed to helping entrepreneurs and small business owners start, manage and grow their business with peace of mind at an affordable price. Our aim is to educate the entrepreneur on the legal and regulatory requirements and be a partner throughout the entire business life cycle, offering support to the company at every stage to make sure they are compliant and continually growing.