Note- A professional tax imposed is subject to the exemption provided by the respective State to particular categories. If the employer has different offices in different states of India, they will need to take Professional Tax Registration in those particular states.
Here are the reasons why one should never miss a professional tax payment
Taxpayers failing to meet the compliance requirements will be dealt with the respective provisions. Here’s an overview of the various defaults and the consequences resulting from it:
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.
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.
Income tax is a direct tax collected by the central government from all taxpayers. It is charged on a certain percentage of their income whereas, professional tax is an indirect tax collected by the state government. It is charged based on a slab for people engaged in business, occupation, or employment.
Each Indian state prescribes its slab for professional tax. For example: In Maharashtra, if your monthly income is between 7,500 to 10,000, then the professional tax levied is 175. Similarly, for monthly incomes above 10,001, the tax levied is 200 for 11 months and 300 on the 12th month. Finally, when the monthly salary is less than 7500, there is no professional tax imposed.
Employers in some states are required to deduct and deposit taxes from employees whose pay exceeds the minimum slab limit. That entity must get a registration certificate as well as an enrollment certificate.
Once the payment has been made, download the payment acknowledgement receipt. The receipt indicates that the payment has been made successfully.
Each individual who registers for a professional tax certificate will receive a certificate which will have the TIN number mentioned as enrollment number or registration number.
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. Professional tax is calculated on the earned gross based on the tax levied by the statement government in the respective states.
Professional tax is a mandatory tax paid by every individual, firm, and company. There are penalties in case of non-compliance.
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 2500 per year. The salary slab structures for levying professional tax differ from state to state.
An individual who is engaged in any activity or any profession, trade, or employment has to pay professional tax in Delhi.
The responsibility to obtain a registration lies with the owner of the business or profession. The business owner/employer is required to deduct the professional tax based on the professional tax slab from the salaries of employees and pay the same to Government before the 15th day of each month or quarter as applicable.
Enrolment Certificate also known as the Professional Tax Enrolment Certificate (PTEC), this registration is obtained for the payment of taxes by the employers.
The employers are required to obtain the registration when employees are appointed. This makes the employees eligible to deduct the professional tax from his employee’s salaries. Registration should be obtained within the 30 days of employing staff.
The State Governments of the following states have levied professional tax:
Punjab, Bihar, Karnataka, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Sikkim, Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh.
Yes, if you have more than one place of work, you have to make a separate application for professional tax registration to the concerned authority.
For delays in obtaining Registration Certificate, a penalty of 5/- per day is levied. In case of non/late payment of profession tax, the penalty will amount to 10% of the amount of tax. In case of late filing of returns, a penalty of 300 per return will be imposed.
The due date for the payment of Profession Tax is 30th June for the employees enrolled before 31st May of the year. The people enrolled after 31st May of a year are requested to pay Profession Tax within one month from the date of enrolment. Employers are requested to file monthly return along with due payment of tax.
In cities like Ahmedabad, both the registration must be obtained simultaneously. In a few places, Shop & establishment registration is a requirement for this application. Hence, it depends on the law of where the jurisdiction of the premise is situated.
Yes, Professional Tax is applicable even for freelance professionals if income exceeds the specified limit as per the Professional Tax Laws applicable in the state where the freelancer resides.
An employer who deducts the tax from the salary of the employee and pays to the government, such entity shall obtain registration certificate while employer if not deduct professional tax then the individual shall get enrolment certificate from necessary authority.
The Certain state allows the concept of a composition scheme under which any individual liable to make payment to the state government may make a lump sum payment in advance of 10,000(at a rate of 2500 *4).
The liability will arise on the date on which the employer disburses salary to any of his employees in the taxable limit for the first time.
The penalty prescribed as per section 5(6) for giving false information in application for Registration Certificate or Enrolment Certificate is equal to three times the tax payable under the Profession Tax Act.
The rate of interest is 1.25 percent per month of the amount of such belatedly paid tax.
This registration need to be taken by an employer. This is for payment of Profession tax deducted from salary of employees. Hence Professional Tax registration Certificate (PTRC) is needed.
This registration is required for businesses that are liable for PTEC registration. For example Doctors, CA etc. need to apply for PTEC. PTEC is the corporate liability of the company.
The professional tax is classified in to two types- Professional Tax -Employer and Professional Tax - Employee.
Every registered business with Enrollment Certificate shall pay tax every year before 30th of April at the specified rates.
In case of employees, an employer is a person responsible to deduct and pay professional tax to the State Government subject to the monetary threshold if any provided by respective state’s legislation, employer (corporate, partnership firms, sole proprietorship etc) also being a person carrying on trade/profession is also required to pay professional tax on his/her trade/ profession again subject to the monetary threshold if any provided by respective State’s legislation.
Company/Firms/LLP: Company, firms, LLP, Corporation, societies, HUF, Associations, clubs are taxable entity.
Professionals(Individuals): Legal Practitioners like solicitors, Notaries, medical representatives like dentist, medical consultants, doctors and other professionals like management consultants, tax consultants, surveyors, CS, CA, Insurance agents, engineers, architects and contractors are all considered as professional individuals who need to pay professional tax.
The professional tax registration procedure varies according to state : The tax slab rates can vary from one state to another, where the business owner have employees under different states , then one have to get a professional tax registration for all the states. Frequency of filing returns: The frequency with which one needs to file returns will depend on the state the person resides in. Therefore before filing a return it’s important to know the rules of the state.
Get registered as a payee of professional tax in a local professional tax office at that specified state. It is imperative for all the individuals and businesses that are liable for the tax payment. Calculate the pay of professional tax in the prescription form. The payment and calculations done must be audited by the chartered Accountant. When it comes to employees, the employer has to deduct the salaries of employees for the professional tax. Once the person gets registered, he is then responsible to pay Professional Tax; different professions are specified with different PT rates.
All these documents are required to be self-attested
Yes, freelancers are also required to register and pay professional tax because professional tax is levied if the income exceeds the limit as specified in the state./p>
If all the 3 companies are in the same state, then you can make the payment from only one company of your choice.
If the employer has different offices in different states of India, they will need to take Professional Tax Registration in those particular states.
Yes if you are a registered doctor with medical council of India or any other council dealing in allopathic, homeopathy, naturopathy or any other discipline of treatment , then it is required for you to take registration and pay PT.
Yes, any Business, Profession , Trade or calling operating for profit motive in Specified state need to take profession tax number and pay PT every year by filing appropriate challan and return. Now Maharashtra Profession tax department has started sending notice for all GST registered dealer who has taken GST but not registered for PT.
Yes. If your Registration application is approved, a Tax Payer Identification Number will be issued. The P TIN is an 11 digit number with the first two digits indicating the State code. You will have to use this TIN for all Tax Purposes. In case you are already a GST dealer and are in possession of a valid TIN, the same number will be allotted for you under the Enrolment Category. Please note that separate TINS will be issued for “Registration” and “Enrolment”
No. You need not approach any office for annual renewal of the P tax registration. Once issued, the certificate is considered to be valid until cancelled.
Once you will get registered with the Professional Tax registration department, Id Password will be issued in order to file a professional tax return. By using such Id password you can file a professional tax return on the website of the Karnataka government. For professional tax return filing you need to login to your account and on the basis of requirements such as monthly filing or quarterly filing, payment should be made.