Professional Tax

What is Professional Tax Registration?

Professional Tax

Professional tax is a tax which is governed by state government. It is apply on those peoples or applied to salaried employees like Chartered accountants, lawyer and doctors. There are the following states which impose this tax Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh. For this Tax you have to register your firm or business with n 30 days or if you’re professionals you have to register with 30 days too. This tax is deducted from salary or wages as per the state. If your firm is on different places you need to be registered all of them in the same department.

If there is delay in registration you have to pay penalty of X Rs. per day as per the state government rules. Professional tax is levied on profession and business.

Persons who are ambit of professional tax are employers employing staff for their business need to obtain registration from the assigned department. Each Professional, the Directors of company and LLP has the liability to register business within 30 days.

Important Points:-

Professional tax is just like Income Tax is collected by the Central Government and Professional Tax is collected by the State Government.

When this tax was first Announced in India, the maximum limit on the tax was Rs. 2500 (i.e: collected tax is maximum charged by professionals is 2500).

This limit is fixed in 1949

There is some revisions on the limit by the state government for raising additional resource

Applicability of Professional Tax as per the Constitution of India:- 

Article 276 of the Constitution of India lays down that “there shall be levied and collected a tax on professions, trades, callings and employments, in accordance with the provisions of this Act. Every person engaged in any profession, trade, calling or employment and falling under one or the other of the classes mentioned in the second column of the Schedule shall be liable to pay to the State Government tax at the rate mentioned against the class of such persons in the third column of the said Schedule. Provided that entry 23 in the Schedule shall apply only to such classes of persons as may be specified by the State Government by notification from time to time.”

Penalties for Non-Compliance on Professional Tax Payment:-

Delays in obtaining Registration Certificate, a penalty of Rs. 5/- per day.

In case of non/late payment of professional tax, the penalty will be 10% of the amount of tax. In case of late filing of returns, a penalty of Rs. 300 per return will be imposed.

Professional Tax Registration Forms:-

There is two types of forms for professional tax registration

Form I- For the employer

Form-II- For a self-employed person

Documents Required:-

Start By Filling A form

Fill the form to start the registration procedure. Fill in all the details that are required.

Submit the Required Documents

Send all the documents that are required, via mail or personally

Documents Submission

After documents submission officer works on the procedure

Complete Registration

As the procedure complete government send you the documents

Employer’s Responsibility for Professional Tax:-

As we know professional taxes apply to professionals like employers, lawyers,s and chartered accountants. So if the employer pays the professional tax so he has to deduct the professional tax from the salary of employees. And pay that amount to the concerned department. He/she has to file a return in the department at the given time. The return should include proof of tax payment. It’s not enclosed then the return should be invalid.

1. What is the maximum limit of professional tax ?

The maximum limit is Rs. 2500 per annum and it’s first announced in 1949.

2. Which states applied Professional tax ?

There are various state who levied professional tax– Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh.

3. Who is responsible to deduct Professional Tax ?
The employer is responsible for the deduction of the tax from the employee’s salary and employer have to submit tax within the 30 days with the tax proof.
4. How to Register for Professional Tax ?

Apply for the registration of professional tax as you start work as a firm with in 30 days. if it’s more than 30 days u have to pay penalties.


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