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How our online professional tax registration process works:
Online Professional Tax Registration - an Overview
Professional tax is a tax that is imposed by state governments on all salaried individuals. Professional tax is applicable to all working professionals, such as chartered accountants, lawyers, and doctors. It is levied based on the individual’s employment, trade or profession. The tax rates differ across all states, however, the maximum amount that can be levied as professional tax is ₹2,500 per annum.
Easy Online Professional Eligibility
Professional tax applicability:
Professional tax is levied on all types of trades and professions in India. It has to be paid compulsorily by every staff member who is employed in any private firm operating in India. Professional tax registration is the onus of every business owner, who must take up responsibility for deduction of professional tax and payment for the same.
Professional tax for self-employed:
Any professional who obtains a monthly regular income will need to pay the professional tax. By the word professional, we mean people employed in specialized fields such as accountancy, media, etc.
Who is exempted from paying professional tax?
The professional tax rules provide exemptions for a few individuals; the exemptions are different based on the state you belong to. The professional tax rules provide exemptions to the following individuals:
- Parents of children suffering from mental or permanent disability
- Members of the armed forces
- Individuals with permanent physical disability
- The age differs state wise
- Badli workers engaged in the textile industry
- Women engaged exclusively as an agent under the directorate of small savings or Mahila Pradhan Kshetriya Bachat Yojana
- Guardians or parents of mentally challenged individuals.
Benefits of Professional Tax Registration
Here are the reasons why one should never miss a professional tax payment
Judicial requirement:Employers in many states of India are strictly bound by the judiciary to obtain the registration of professional tax. After the registration, they have to make the deductions and pay the service taxes of all the employees who work under them.
Avoid paying penalties:Failure to professional tax registration results in huge penalties that keep on increasing over time.
Easy to comply:The professional tax regulations are so easy to follow. The registration procedures can be done quickly and the further proceedings are also much easier.
Deductions:Deductions can be claimed in the salary on the basis of the professional tax paid. The deductions will be allowed in the year corresponding to which the taxpayer made the payments.
State government tax:The local authorities and the state government have the right to collect all the professional taxes based on employment, profession trades and much more. The collected amount of professional tax per annum should not go beyond ₹2500 per annum.
Documents Required for Professional Tax Registration
- Certificate of incorporation, including MOA and AOA/LLP agreement
- PAN card of company/LLP attested by the company director
- Proof of office location with NOC from the owner of the premises
- Proof of company bank account with bank statement and a cancelled cheque
- Passport size photograph, address and identity proof from all the directors
- Board resolution/ statement of consent by the partners
- Shop and establishment certificate
- Salary register and attendance register.
Online Professional Tax Registration - Detailed Process
- Step 1: PAN card, address, and identity proof of all the directors/partners/proprietors of the company must be provided
- Step 2: All the employee details must also be furnished
- Step 3: The application form for professional tax must be filled by the employees
- Step 4: Our experts will submit it to the concerned authorities
- Step 5: The basic acknowledgement will be provided by us within 5 to 7 working days
- Step 6: The registration hard copy will be issued within 10 days in all the major cities
- Step 7: In other places, it might take up to 15 to 20 working days.
Understanding the Professional Tax Registration Applicability
In the case of professional tax, firms, LLPs, corporations, societies, HUFs, associations, clubs, and companies are considered taxable entities. All the branches involved in these will also be considered separate individuals under professional tax.
Legal practitioners such as notaries and solicitors, medical representatives such as dentists, medical consultants, doctors, and other professionals such as management consultants, tax consultants, surveyors, company secretaries, chartered accountants, insurance agents, engineers, architects, and contractors are all considered professional individuals who need to pay professional tax.
Partners and Directors
People who act as company directors, firm partners, LLP partners, and designated partners should pay professional tax. They should register under the professional tax act within 30 days of getting appointed in these roles.
Within 30 days of the company's incorporation, the company/firm must get a professional tax enrollment certificate (PTEC) by registering on the government portal.
The company/firm must have a professional tax registration certificate (PTRC) within 30 days of employing a staff member. The employers are supposed to deduct professional tax from the salary of the people employed under them and submit it at the professional tax department during the time of filing returns.
- The employers are supposed to deduct professional tax from the salary of the people employed under them and submit it at the professional tax department during the time of filing returns. The employer will have to register at the professional tax department before 30 days of its applicability.
What are the Consequences of Professional Tax Violation?
Though the actual penal interest or penalty can change according to each state’s legislation board, all states will be charged a penalty if they have not registered after the professional tax legislation is made applicable. Also, penalties will be charged if the payments are not made within the due date or if the return is not filed within the due date specified.
Why CADesk India ?
We at CADesk India are ready to assist you whenever you need. Here are some of the ways in which we can help you with online professional tax registration:
Preparing the application
It can be a muddling task to prepare the application as the terms and formalities can be a bit difficult to comprehend. Our professional tax experts do a proper assessment of the business and prepare a document for tax application with the government of the respective state.
Filling out the application form
Our experts will then fill out and submit the duly signed form with the concerned department in the respective city or town.
The submitted application will then be scrutinized in detail by the relevant state government(s). Once found to be proper, your professional tax registration is done.
Professional Tax Registration Certificate
Direct taxes are taxes imposed on income, capital gains and net worth. Gift tax, death duties and property tax are also considered direct taxes.
Double taxation is juridical when the same person is taxed twice on the same income by more than one state. Double taxation is economic if more than one person is taxed on the same item.
FAQs on Avoid Penalties... Register for Professional Tax Now!
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.
One may apply directly for a professional tax registration certificate through the official website of their state. However, it is recommended that you get professional help for the first time. Contact Vakilsearch to get the certificate in no time.
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.
Employers are required to obtain the registration when employees are appointed. This makes the employee eligible to deduct the professional tax from his employee’s salaries. Registration should be obtained within the 30 days of employing staff.