Professional Tax Registration: What you need to Know Before you Start

Professional tax registration is a mandatory requirement for every business owner and professional in India. This tax is levied by state governments and is applicable to individuals who are engaged in professions, trades, or employment. The tax collected goes towards the development of the state and its infrastructure. In this article, we will discuss everything you need to know about professional tax registration before you start your business.

Professional tax is required since it is a key source of revenue for Indian state governments. The tax is used to pay for numerous social welfare programmes, infrastructure development, and other community-benefiting projects.

The professional tax also aids in the enforcement of tax rules and regulations by requiring individuals to register with the state government’s professional tax department and pay the tax on their income regularly. This serves to combat tax avoidance and ensures that everyone who makes a living contributes to the state’s welfare and growth.

Furthermore, professional tax helps to build a more equitable tax system by distributing the tax burden across a larger population base. The state government can collect revenue from a large number of people by requiring those who earn an income from a wage or profession to pay professional tax, rather than relying on a small number of rich persons to fund its programmes and projects.

What is Professional Tax Registration

Professional Tax Registration is a tax charged by Indian state governments on individuals who earn a living through a wage or a profession. This tax is classified as a state tax, distinct from the federal income tax. Professional tax rates and administration differ from state to state. The amount of professional tax that must be paid is determined by the individual’s monthly wage. In most states, professional tax is calculated monthly and must be paid by the 15th of each month.

The goal of the professional tax is to generate income for the state government and to pay for various social welfare programmes and other government initiatives. Employees in private enterprises, self-employed individuals, and individuals earning income from professions such as doctors, lawyers, chartered accountants, and architects are often subject to the tax.

Individuals must first register with the state government’s professional tax department to pay professional tax. The employer is normally responsible for this registration, and the individual is given a professional tax registration number. The employer subsequently deducts the tax from the employee’s wage and pays it to the state government on the employee’s behalf.

Failure to pay professional tax results in penalties such as fines and interest on the amount outstanding. Individuals who fail to pay professional tax regularly may risk legal action in some situations.

Thus, professional tax registration is a required process for persons earning an income in India. The tax is a key source of revenue for state governments, assisting in the funding of critical social welfare programmes and other government projects. Individuals can assure compliance with the law and prevent penalties or legal action by registering for professional tax and paying it on time.

Who Needs to Register for Professional Tax?

Every business owner and professional engaged in a profession, trade, or employment in India needs to register for professional tax in India. The following categories of people need to register for professional tax:

1. Self-employed individuals such as doctors, lawyers, architects, and chartered accountants.
2. Employers who have employed staff members are paid salaries.
3. Business owners who are engaged in trades or professions.
4. Freelancers who are providing services to clients.
5. Directors of companies who are receiving a salary.

How to Register for Professional Tax?

The process of registering for professional tax varies from state to state, but the general steps are as follows:

Professional Tax Registration in Maharashtra

Professional tax registration is required in Maharashtra within 30 days of establishing a business. It should be emphasized that the professional tax applies not only to hired personnel but also to directors and partners of the specific firm or establishment. 

Businesses with no employees must obtain a Professional Tax Enrolment Certificate (PTEC), which allows directors, partners, and proprietors to pay their professional taxes. Nonetheless, the business must obtain a Profession Tax Registration Certificate (PTRC) whenever it begins paying any of its employees $75,000 or more each month.

All that is required to complete PTEC and PTRC registrations is to fill out the appropriate forms and secure login. The department then issues an appointment, for which the necessary documentation must be provided.

The following is the procedure for registering for Professional Tax in Maharashtra:

• Step 1: The Income Tax Department will issue you a Permanent Account Number (PAN).
• Step 2: Visit the Maharashtra Professional Tax Department’s official website.
• Step 3: Fill out the online registration form with all of the essential information, including personal information, income information, and evidence of identity and address.
• Step 4: Upload all required documents, including identity and address evidence, as well as payment information.
• Step 5: The professional tax department will conduct your registration and issue a professional tax registration number after you submit the online form and needed documentation.
• Step 6: Provide your professional tax registration number to your employer, who will be responsible for deducting and paying the professional tax on your behalf to the state government.
• Step 7: Every month, you must pay the professional tax by the 15th, and your company will take the tax from your pay and submit it to the professional tax department.

Professional Tax Registration in Haryana

The professional tax is levied by the state government on professionals and members. Haryana’s professional tax collection and administration are governed by the Haryana State Tax on Professions, Trades, Callings, and Employments Act, 1975.

Professional Tax in Haryana is available online on the State Sales Tax Department’s website. The following is the procedure:

• Step 1: Form 1 must be filled out within 30 days of becoming liable to pay the professional tax.
• Step 2: When Form 1 is submitted, an acknowledgment is generated with the day and time for attending the registration authority.
• Step 3: The application must be signed by the company’s proprietor, partner, or director and submitted to the relevant professional tax registration authority.
• Step 4: After receiving the signed application, the professional tax registration is supplied in Form 1-A along with a TIN (Registration number under the profession tax act)

Professional Tax Registration in Telangana

The Telangana Government’s Commercial Taxes Department is in charge of collecting Profession Tax dues from the state’s professionals. According to the Telangana Professional Tax Act, 1987, an individual is required to pay a Profession Tax of up to Rs.2500 and a minimum slab of Rs.110 every year.

Follow the procedures below to register for professional tax online:

• Step 1: The applicant must go to the official website of the Telangana government’s Commercial Tax Department.
• Step 2: Click on “E-Registration,” on the portal’s homepage.
• Step 3: From the dropdown menu, select “PT (Professional Tax) Registration”.
• Step 4: When the login screen appears on the following page, the user must sign in by entering a valid email ID and verification code.
• Step 5: After filling out the form, click the “Submit” button.
• Step 6: If you are registered with the Commercial Taxes Department of Telangana for additional operations such as VAT/CST/LT/ET, input the corresponding TINs, and the system will populate your user data. In this situation, the user can change and apply the necessary data.
• Step 7: For a new user, input the organization and other relevant details before clicking the “Submit” button.
• Step 8: After you’ve double-checked all of your information, click the “Next” button.
• Step 9: For future reference, the system will generate a reference number.
• Step 10: On the next screen, provide the information for the Owner/Managing Director/Managing Partner.
• Step 11: If you haven’t designated anyone as an authorized person, click the “No” button.
• Step 12: If you have nominated an individual as an authorized person, select the “Yes” icon and enter the licensed person’s information.
• Step 13: Enter all of the approved person’s information and click the “Next” button.
• Step 14: Enter the bank account information and click the “Add” button.
• Step 15: The user has the option of entering more than one or two bank account data.
• Step 16: After inputting your bank information, click the “Next” button.
• Step 17: Enter the information for other locations and click the “Next” button.
• Step 18: After validating the entered information, click the “Finish” button to complete the registration.

The applicant can check the progress of the Registration by doing the following steps:

• Step 1: The applicant must return to the Telangana Commercial Tax Department’s portal.
• Step 2: From the new dealer menu, select the Track Registration Status option.
• Step 3: Select the professional tax category and input the reference number.
• Step 4: To check the status of your application, click the “Search” icon.

Professional Tax Registration Tamil Nadu

The professional tax is levied by the state government on professionals and members. The Tamil Nadu State Tax on Professions, Trades, Callings, and Employments Act, 1975 governs the levy and administration of professional taxes in the state.

Professional Tax in Tamil Nadu is available online via the State Sales Tax Department’s website. The following is the procedure:

• Step 1: Form 1 must be filled out within 30 days of becoming liable to pay the professional tax.
• Step 2: When Form 1 is submitted, an acknowledgment is generated with the day and time for attending the registration authority.
• Step 3: The application must be signed by the company’s proprietor, partner, or director and submitted to the relevant professional tax registration authority.
• Step 4: After receiving the signed application, the professional tax registration is supplied in Form 1-A along with a TIN (Registration number under the profession tax act)

Professional Tax Registration Online Gujarat

The professional tax is levied by the state government on professionals and members. The Gujarat State Tax on Professions, Trades, Callings, and Employments Act, 1975 governs the levy and administration of professional taxes in Gujarat.

Professional Tax in Gujarat can be accessed online at the website of the State Sales Tax Department. The following is the procedure:

• Step 1: Form 1 must be filled out within 30 days of becoming liable to pay the professional tax.
• Step 2: When Form 1 is submitted, an acknowledgment is generated with the day and time for attending the registration authority.
• Step 3: The application must be signed by the company’s proprietor, partner, or director and submitted to the relevant professional tax registration authority.
• Step 4: After receiving the signed application, the professional tax registration is supplied in Form 1-A along with a TIN (Registration number under the profession tax act)

The due date for reporting Professional tax in Gujarat varies according to the date of enrolment; for organizations enlisted before the start of a year on or before May 31st, the due date is June 30th of that year.

If the entity enrolls after May 31st, the professional tax payment is required one month after the date of enrolment.

Professional Tax registration Certificate Download

The procedure for downloading a Professional Tax Registration Certificate in India varies by state, but normally entails the following steps:

• Step 1: Go to the official website of the relevant professional tax department in your state of registration.
• Step 2: Navigate to the section where you may download Professional Tax Registration Certificates.
• Step 3: To access your certificate, enter your professional tax registration number or your Permanent Account Number (PAN).
• Step 4: Make a copy of your certificate for your records.

In some situations, you may also be able to request that a hard copy of your certificate be mailed to you.

It is critical to preserve a copy of your Professional Tax Registration Certificate for your records and to ensure compliance with the law. If you have any problems downloading your certificate, you can get help from the professional tax department.

How to Surrender a Professional Tax Registration Certificate

Surrendering a Professional Tax Registration Certificate in India varies by state, but normally consists of the following steps:

• Step 1: Make the cancellation application online by logging into your account.
• Step 2: Print out the Acknowledgement.
• Step 3: Turn in the following document to the department. Cancellation application with a court cost of 5 Rs Stamp.
  Original Professional Tax Certificate. 
  Original Challan Copy.
  Letter of Authority in favor of department attendee.
  Evidence of closure (bank statement, Previous year financial, Salary Register, etc).
• Step 4: After you have submitted all of the required documentation, the department will cancel the certificate in 30 days; you can check the status online.
• Step 5: Keep in mind that you must complete the essential return until the department cancels it.

Conclusion 

Professional tax registration is a mandatory requirement for every business owner and professional in India. It is important to register for the professional tax to comply with state laws and avoid penalties. The registration process may vary from state to state, but it generally involves obtaining the application form, filling in the required details, submitting the application, and obtaining the registration certificate. The documents required for professional tax registration include a PAN Card, an Aadhaar Card, proof of address, proof of business, bank account details, and employee details.

The professional tax rates in India vary from state to state, with a maximum limit of INR 2,500 per annum. It is important to note that failure to register for professional tax can result in penalties and legal action.

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InstaSpaces is a technology-driven workspace solutions provider that offers a range of services to businesses and individuals, including virtual offices, meeting rooms, GST registration, and business address. As part of our commitment to providing comprehensive workspace solutions, we understand the importance of complying with state laws and regulations, including professional tax registration.

Our team of experts can assist you in navigating the professional tax registration process and ensure that you have all the necessary documents and information required for registration. With a presence in over 50 cities across India, we are well-equipped to offer customized solutions that cater to your unique requirements. Contact us today to learn more about our services and how we can help you with professional tax registration.

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