Professional tax is a direct tax paid on individuals who earn an income via the practice of a profession, occupation, calling, or trade. Professional tax, as opposed to income tax, is charged by the government of a state or union territory in India. In the case of salaried and wage earners, the Employer is required to deduct professional tax from the salary/wages and deposit it with the state government. In the case of other types of individuals, this tax must be paid by the employee.
Professional tax and GST are two distinct tax regimes in India, and the registration requirements for both differ. While GST registration is mandatory for businesses with an annual turnover exceeding Rs. 40 lakhs (for goods) or Rs. 20 lakhs (for services), professional tax registration is mandatory for businesses that employ people and are engaged in any trade, profession, or vocation.
Professional tax is a state-level tax levied by the respective state governments, and the rates may vary from one state to another. The tax collected is used for the welfare of professionals such as doctors, lawyers, and chartered accountants. Therefore, if your business has employees in Gurgaon, you will need to register for professional tax, regardless of whether you have GST registration or not.
Professional tax registration is mandatory for businesses that employ people in Gurgaon, while GST registration is mandatory for businesses with a certain level of annual turnover. It is essential to ensure that your business complies with all the necessary registration requirements to avoid any penalties or legal issues.
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Applicability of Professional Taxes
This tax applies to all professions, trades, and employment. The following classes of people are subject to the professional tax:
- A single person
- An Undivided Hindu Family (HUF)
- A company/firm/cooperative society/association of individuals, whether incorporated or not.
Professionals who earn a living through salary or other means, such as lawyers, teachers, doctors, chartered accountants, and so on, must pay professional taxes.
States in India that have Professional Taxes
After understanding what is professional tax registration in India let us have a look at the table below for further information on the states in India that levy professional taxes:
| 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 |
Professional Tax Rate
The highest amount payable in professional tax per year is INR 2,500. The professional tax is normally a flat rate based on the professional’s gross income. Every month, it is withdrawn from his pay.
A state’s or union territory Commercial Taxes Department is the nodal entity in charge of collecting professional taxes based on established tax slabs that differ by state and union territory. The tax is determined based on the individual’s annual taxable income; however, it can be paid either annually or monthly.
Who is Responsible for Paying Profession Taxes?
In the case of Salaried and Wage-earners, the Employer is required to deduct Professional Tax from the Salary/Wages and deposit the same with the state government.
Self-employed individuals who carry out their profession or trade on their own and are subject to the professional tax must pay the tax to the state government.
Employer Duty for Professional Taxes
The owner of a business is responsible for deducting professional tax from his employees’ salaries and remitting the collected amount to the proper government department. He or she must submit a return to the tax department in the prescribed form and within the time-frame indicated. Proof of tax payment should be included with the return. If the payment evidence is not enclosed, the register will consider the return incomplete and invalid.
Exemptions from Professional Tax Payment
Under the Professional Tax Rules, certain individuals are excluded from paying Professional Tax. Professional Tax is not levied on the following individuals:
- Parents of children with physical or mental disabilities
- Members of the forces as specified in the Army Act of 1950, the Air Force Act of 1950, and the Navy Act of 1957, including auxiliary forces or reservists serving in the state.
- Textile workers from the Badli tribe
- A person who has a permanent physical disability (including blindness)
- Women only work as agents for the Mahila Pradhan Kshetriya Bachat Yojana or as Directors of Small Savings.
- Individuals with a mental disability’s parents or guardians.
- Individuals over the age of 65
Tax Registration and Compliance for Professionals
Professional Tax Registration is required within 30 days of hiring employees in a business or, in the case of professionals, within 30 days of beginning practice.
- Within 30 days of hiring employees for his business, he should apply for a Registration Certificate with the assessed state tax agency.
- If the assessee has more than one place of work, the application should be lodged separately with each authority for the place of work under its jurisdiction.
Professional Tax Payment Deadlines
If an employer employs more than 20 people, he must make the payment within 15 days of the end of the month. However, if an employer has fewer than 20 employees, he must pay quarterly (i.e. by the 15th of next month from the end of the quarter).
Professional Income Tax Return
The Professional Tax Return must be filed by all individuals with Professional Tax Registration, and the due dates for filing such returns vary by state.
Required Documents for Professional Tax Registration
- MOA and AOA PAN Card of Company/LLP/Proprietor/Owner/Director NOC from the landlord, where the business is located
- Proprietor/Owner/Director address and identity pictures in passport size proof of Proprietor/Owner/Director Employee details and salaries paid
- Extra registrations and licenses
Professional Tax Registration Procedure
The procedure for Professional Tax Registration varies by state. Furthermore, depending on the state’s requirements, returns must be filed at specific periods. Professionals and employers seeking professional tax registration must follow the steps outlined below.
- The applicant must submit the application form as well as the required documentation.
- The applicant must submit the Application along with the required documentation to the relevant state government. A copy of the same should be sent to the tax department as well.
- When a tax application is received, the tax authorities must review it to ensure that all of the information is correct.
- Certificate of Registration: After successfully evaluating all of the paperwork, the authority will issue the Registration certificate.
- Once done, a professional tax registration certificate download can be done easily.
The Advantages of Professional Tax Registration
The following are the advantages of Professional Tax Registration:
- Compliance with Professional Tax Compliance is straightforward, resulting in a seamless registration process with few constraints.
- According to the law, it is compulsory to pay Professional tax. As a result, prompt payment of Professional tax can aid in the avoidance of penalties and punitive action against the Employer or a self-employed individual.
- Professional tax compliance is straightforward, allowing for an easy and trouble-free registration process.
- The Professional Tax serves as an income stream for state governments, allowing them to execute various programs for the region’s welfare and development.
- Employers and self-employed individuals can seek a deduction for previously paid professional taxes.
Penalties for Failure to Register for Professional Taxation
When professional tax policy is implemented, all such jurisdictions may levy a penalty for failure to register for Profession Tax. The specific amount of the Penalty, however, will be determined by state regulatory law.
Penalties are also imposed for failing to submit the PT return by the deadline and withholding payments after they are due. The real penalties are determined by each state’s professional tax regulations. Businesses that fail to register for professional tax, fail to pay taxes on time, or fail to file returns on time may face fines, late fees, or jail.
Failure to make a payment by the due date, as well as failure to file a return by the due date, result in further penalties. For example, the information below outlines the government’s penalty amount for late filing or inability to pay Professional Tax.
Is GST registration subject to professional tax registration?
Yes, because professional tax is a state tax, you must pay it. The tax slab rates differ from one state to the next. So, before you pay the professional tax, check with your employer. I’ll offer the professional tax slab rates of different states to help you understand.
- Professional Tax Registration in Telangana:
| Salary per month | Tax |
| Up to Rs. 15,000 | NA |
| Rs. 15,000 to Rs. 20,000 | Rs. 150 |
| Rs. 20000+ | Rs. 200 |
- Professional Tax Registration in Kerala:
| Salary per month | Tax |
| Up to Rs. 1999 | NA |
| Rs. 3,000 to Rs. 4,999 | Rs. 20 |
| Rs. 3,000 to Rs. 7,499 | Rs. 30 |
| Rs. 5,000 to Rs. 7,499 | Rs. 50 |
| Rs. 7,500 to Rs. 9,999 | Rs. 75 |
| Rs. 10,000 to Rs. 12,499 | Rs. 100 |
| Rs. 12,500 to Rs. 16,666 | Rs. 125 |
| Rs. 16,667 to Rs. 20,833 | Rs. 166 |
| Rs. 20,834+ | Rs. 208 |
- Professional Tax Registration in West Bengal:
| Salary per month | Tax |
| Up to Rs.10,000 | 0 |
| Rs.10,001 to Rs.15,000 | Rs.110 |
| Rs.15,001 to Rs.25,000 | Rs.130 |
| Rs.25,001 to Rs.40,000 | Rs.150 |
| More than Rs.40,000 | Rs.200 |
- Professional Tax Registration in Maharashtra:
| Salary per month | Tax |
| Till Rs.7,500 (men) | NA |
| Till Rs.10,000 (women) | NA |
| Rs.7,501 to Rs.10,000 | Rs. 175 |
| Rs.10,000+ | Rs. 200 (300 for the last month) |
- Professional Tax Registration in Karnataka:
| Salary per month | Tax |
| Up to Rs.14,999 | NA |
| 15,000+ | Rs. 200 |
- Professional Tax Registration in Andhra Pradesh:
| Salary per month | Tax |
| Up to Rs.15,000 | NA |
| Rs.15,001 to Rs.20,000 | Rs. 150 |
| Rs.20,000+ | Rs. 200 |
- Professional Tax Registration in Tamil Nadu:
| Salary per month | Tax |
| Up to Rs.3,500 | NA |
| Rs.3,5001 to Rs.5,000 | Rs. 22.5 |
| Rs.5,001 to Rs.7,500 | Rs. 52.5 |
| Rs.7,501 to Rs.10,000 | Rs. 115 |
| Rs.10,001 to Rs.12,500 | Rs. 171 |
| Above Rs.12,500 | Rs. 208 |
Get Your Business Compliant: Trust InstaSpaces for Professional Tax Registration for GST
InstaSpaces is a reliable and efficient platform to help businesses register for Professional Tax Registration in India. Professional tax registration is mandatory for all businesses operating in India, with different state governments having their own regulations regarding PT. InstaSpaces provides businesses with a hassle-free process for professional tax registration, ensuring compliance with all state laws and regulations.
By choosing InstaSpaces for professional tax registration, businesses can focus on their core operations without worrying about the complex legal procedures involved in the registration process. The team at InstaSpaces is well-versed in the professional tax registration process and can provide businesses with the necessary guidance to ensure smooth and timely registration.
In addition to professional tax registration, InstaSpaces also offers a range of services to help businesses stay compliant with various regulatory requirements, such as GST registration and virtual office solutions. With a strong presence across major cities in India, InstaSpaces is well-positioned to cater to businesses of all sizes and sectors.
Overall, businesses looking for a reliable and efficient partner for professional tax registration and compliance can trust InstaSpaces to provide them with the necessary expertise and support to ensure seamless operations.
Phone:- +91–888-270-2020
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