facebook

Professional Tax

What is professional tax?

Professional Tax is a tax that is levied by the state government, it is levied on the income that is earned by the trade and is remitted by the employer. A person has to pay a professional tax of around Rs.2500 every year to the state or any local authority by the way of the tax on the profession, trades, callings, and the employments.

Professional tax in India is not just levied on the professionals but it is levied on all employees, a person carrying business, freelancers and professionals, etc and it is subject to the income exceeding the monetary threshold if there is any.

Professional tax is a kind of tax that is levied by the state government. The state government is also empowered to make laws with to the professional tax though being a tax on income under Article 276 of the constitution of India which deals with the taxes on profession, trades and callings, and employment. It may be noted that the professional tax is a deductible amount and can be deducted from the taxable income.

Professional tax is just like income tax, but the central government and the professional tax collect the income tax managed by the state government. At the time of the introduction, the maximum limit on the tax to be collected as the professional tax was Rs. 250. There has been an upward revision of the professional tax to Rs. 2500 and has allowed the government to raise the additional resources.

Who has to pay the Professional in India

Professional Tax in India is applicable for the individuals and entities mentioned here :

  • Companies
  • Firms
  • Limited Liability Partnerships
  • Corporation
  • Societies
  • Hindu Undivided Family
  • Associations
  • Clubs
  • Legal Practitioners
  • contractors, Architects
  • Engineers
  • Insurance Agents
  • Chartered Accountants
  • Company Secretaries
  • Surveyors
  • Tax consultants
  • Management Professionals as well as Medical Representatives such as doctors, etc.

Who is exempted from paying the professional tax in India?

  • Ex-servicemen
  • Individuals serving in the Central Para Military Force (CPMF)
  • People who run educational Institutions teaching up to class 12
  • Handicaps with at least 40% disability. A relevant Certificate must be submitted.
  • Any person who has a permit for a single three-wheeler or a single taxi to carry goods.
  • Individuals who are deaf, dumb, and blind are earning a salary.
  • Civilians as well as non-civilian members from the armed forces.
  • Technicians from foreign countries who are employed by the state

The penalties on professional Tax vary in each state. Also, there is a penalty for Non-Registration. Along with the penalty for non-payment, there is also a penalty for late return filing.

Documents required for Professional tax registration in India

  • An acknowledgment of the online form, along with the printout of the digital form submitted.
  • Copy of PAN Card.
  • Residence proof of Partner, Director, Proprietor.
  • Proof of Constitution of business like Certificate of Incorporation.
  • Memorandum of Association
  • Articles of Association
  • Address proof of Business place.
  • Blank Cancelled Cheque.
  • Establishment Certificate.
  • PAN& PTEC details.
  • Current account statement
  • Business premise proof sale deed if the premise is owned and NOC from the owner of the place is rented.

Professional Tax registration

The procedure for the registration of professional tax varies from state to state, the slab rates can vary from one state to another, where the business owner has employees that are employed in different states then one has to get a professional tax registration for all the states.

The application for the registration under professional tax is to be submitted to the state tax department within 30 days of employing the staff in the business. If there is more than one place of work then an application is to be made separately to each authority considering the place of work that comes under the authority's jurisdiction.

In case there is a delay in the payment of the professional tax, there is a penalty of Rs 5 per day, there is also a penalty of nonpayment there is a penalty of 10% of the tax.

Frequency of filing the returns: The frequency with which one has to file the returns are also depended on the state the person is residing in, so before filing the returns it is very important to know the rules of the particular state.

Which states levy Professional tax in India?

The maximum amount an individual needs to pay as professional tax is Rs.2500. The tax amount is based on the gross income of the professional. It happens to be deducted from his or her income every month by the employer. Here is the list of states where the professional tax is levied.

  • Andhra Pradesh
  • Assam
  • Bihar
  • Chattisgarh
  • Gujarat
  • Karnataka
  • Kerala
  • Madhya Pradesh
  • Maharashtra
  • Manipur
  • Meghalaya
  • Mizoram
  • Orissa
  • Puducherry
  • Tamil Nadu
  • Tripura
  • West Bengal

Here is the list of states where the professional tax is not applicable

  • Arunachal Pradesh
  • Delhi
  • Goa
  • Haryana
  • Himachal Pradesh
  • Jammu & Kashmir
  • Jharkhand
  • Nagaland
  • Punjab
  • Rajasthan
  • Sikkim
  • Uttar Pradesh
  • Uttaranchal
  • Andaman & Nicobar
  • Chandigarh
  • Daman & Diu
  • Dadra & Nagar Haveli
  • Lakshadeep

Why is Professional tax different in a different state?

As the state government levies the professional tax, it differs in each state. Each state declares a slab, and the professional tax is deducted based on these slabs. Many states and union territories do not charge any professional tax too. The professional tax is paid in 12 equal installments, in such situations where the source of income is falling under the sectors they will be liable for separate tax.

As each state has its regulations and laws on the professional tax, the professional tax varies from state to state. However, a slab system is followed by all the states. The slab system is based on the income of the individual. Hence, the state government levies the tax based on income.

Types of Professional Tax Certificates

There are two types of Professional tax certificates:

PTEC (Professional tax enrollment certificate): This is paid by the business entity, owner, or the professional i.e. Private or the Public Limited Company, Sole proprietor, Director, etc.

PTRC (Professional tax registration certificate): The government or the Non- government employer is deducting the tax from the employee's wages and deposit the same to the government.

Professional Tax Registration Cost

Pay as you go grow pricing

All Inclusive Pricing - No Hidden Fee

Basic

12899

all inclusive fees

Professional tax registration for employers having less than 20 employees.

Premium

15899

all inclusive fees

Professional tax registration for employers having more than 40 employees.

Frequently asked questions

How is professional Tax calculated?

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.

How much Professional Tax is deducted from my salary?

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

Is it mandatory to pay Professional Tax?

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

Why is Professional Tax Different in every state?

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.

What is a professional tax and when is it levied?

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

Is professional tax imposed in each state in India?

Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Orissa, Tripura, Madhya Pradesh, and Sikkim.

Who deducts the tax and deposits the same with the government?

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

Who has to pay professional tax in India?

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

What is the time limit for obtaining the professional tax registration certificate?

An employer who is obtaining the registration certificate has to apply for the same within thirty days of becoming liable to pay the tax.

Who is assessed under the professional tax act?

The employer is liable to pay the professional tax that is assessed under the profession tax act.

IndiaFilings has helped thousands of entrepreneurs and Professionals right from incorporation to post-incorporation compliances. Get In touch with our advisor to know about the services offered by us.

Professional Tax Registration in State

Professional Tax Registration in City

Professional Tax Registration In Mumbai

Professional Tax Registration In Bangalore

Professional Tax Registration In Chennai

Professional Tax Registration In Ahmedabad

Professional Tax Registration In Pune

Professional Tax Registration In Agra

Professional Tax Registration In Ajmer

Professional Tax Registration In Aligarh

Professional Tax Registration In Amravati

Professional Tax Registration In Amritsar

Professional Tax Registration In Asansol

Professional Tax Registration In Aurangabad

Professional Tax Registration In Bareilly

Professional Tax Registration In Belgaum

Professional Tax Registration In Bhavnagar

Professional Tax Registration In Bhiwandi

Professional Tax Registration In Bhopal

Professional Tax Registration In Bhubaneswar

Professional Tax Registration In Bikaner

Professional Tax Registration In Chandigarh City

Professional Tax Registration In Nagpur

Professional Tax Registration In Cuttack

Professional Tax Registration In Dehradun

Professional Tax Registration In Dhanbad

Professional Tax Registration In Bhilai

Professional Tax Registration In Durgapur

Professional Tax Registration In Erode

Professional Tax Registration In Faridabad

Professional Tax Registration In Firozabad

Professional Tax Registration In Ghaziabad

Professional Tax Registration In Gorakhpur

Professional Tax Registration In Gulbarga

Professional Tax Registration In Guntur

Professional Tax Registration In Gwalior

Professional Tax Registration In Gurgaon

Professional Tax Registration In Guwahati

Professional Tax Registration In Indore

Professional Tax Registration In Jabalpur

Professional Tax Registration In Jaipur

Professional Tax Registration In Jalandhar

Professional Tax Registration In Jammu

Professional Tax Registration In Jamnagar

Professional Tax Registration In Jamshedpur

Professional Tax Registration In Jhansi

Professional Tax Registration In Jodhpur

Professional Tax Registration In Kakinada

Professional Tax Registration In Kannur

Professional Tax Registration In Kanpur

Professional Tax Registration In Kochi

Professional Tax Registration In Kottayam

Professional Tax Registration In Kolhapur

Professional Tax Registration In Kollam

Professional Tax Registration In Kota

Professional Tax Registration In Kozhikode

Professional Tax Registration In Kurnool

Professional Tax Registration In Ludhiana

Professional Tax Registration In New Delhi

Professional Tax Registration In Hyderabad

Professional Tax Registration In Kolkata

Professional Tax Registration In Lucknow

Professional Tax Registration In Madurai

Professional Tax Registration In Malappuram

Professional Tax Registration In Mathura

Professional Tax Registration In Goa City

Professional Tax Registration In Mangalore

Professional Tax Registration In Meerut

Professional Tax Registration In Moradabad

Professional Tax Registration In Mysore

Professional Tax Registration In Nanded

Professional Tax Registration In Nashik

Professional Tax Registration In Nellore

Professional Tax Registration In Noida

Professional Tax Registration In Palakkad

Professional Tax Registration In Patna

Professional Tax Registration In Pondicherry

Professional Tax Registration In Allahabad

Professional Tax Registration In Raipur

Professional Tax Registration In Rajkot

Professional Tax Registration In Rajahmundry

Professional Tax Registration In Ranchi

Professional Tax Registration In Salem

Professional Tax Registration In Sangli

Professional Tax Registration In Siliguri

Professional Tax Registration In Solapur

Professional Tax Registration In Srinagar

Professional Tax Registration In Thiruvananthapuram

Professional Tax Registration In Thrissur

Professional Tax Registration In Tiruchirappalli

Professional Tax Registration In Tirupati

Professional Tax Registration In Tirunelveli

Professional Tax Registration In Tiruppur

Professional Tax Registration In Tiruvannamalai

Professional Tax Registration In Ujjain

Professional Tax Registration In Vadodara

Professional Tax Registration In Varanasi

Professional Tax Registration In Vijayawada

Professional Tax Registration In Vellore

Professional Tax Registration In Warangal

Professional Tax Registration In Bilaspur

Professional Tax Registration In Perinthalmanna

Professional Tax Registration In Purulia

Professional Tax Registration In Shimla

Professional Tax Registration In Tirur

Professional Tax Registration In Surat

Professional Tax Registration In Visakhapatnam

Professional Tax Registration In Gandhinagar

Professional Tax Registration In Coimbatore

Professional Tax Registration In Trichy

Professional Tax Registration In Anand

Professional Tax Registration In Patiala

Professional Tax Registration In Roorkee

Professional Tax Registration In Etawah

Last updated: Sep 07, 2021

X
User

Hi there,

We are available online!

loading...