Professional Tax Registration

Professional Tax is a state-level tax that applies to salaried employees and professionals, including chartered accountants, lawyers and doctors.




    How Does Professional Tax Registration Work For You?

    A company working in different states is required to register for professional tax in all the states it is present at.

    Step 1

    We do a thorough check of the files you send in

    Step 2

    We will appoint an affiliate to process your application

    Step 3

    The TIN will be issued within 15 days of the application

    Online Professional Tax Registration - An Overview

    Professional tax is a tax that is imposed by the State government on all salaried individuals. Professional tax is applicable to all working professionals like 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 Rs.2,500 per annum.

    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 Variation With Each State

    Professional tax payment will always have distinct rates that keep varying from state to state. The state governments which are levying state tax are West Bengal, Maharashtra, Karnataka, Kerala, Assam, Madhya Pradesh, Orissa, Tripura, Meghalaya, and Gujarat.

    Professional Tax For Self-Employed

    Any professional who gets a regular income on a monthly basis will have to pay the professional tax. By the term professional, we imply people working in specialized fields like accountancy, media, medicine, information technology, media, etc.

    Professionals offering freelance services also need to pay professional tax using a special type of form. They can fill the form and get a registration number first. Then, using that number, they can pay their taxes in the corresponding banks.

    In certain states in India, specifically , Maharashtra Profession Tax Act amended from 1.4.2018, Now a Limited Liability Partnership and each partner of LLP shall be liable to pay PT of Rs. 2,500/- per annum.

    Exemption From Professional Tax Payment

    The following individuals are exempted from pa professional tax:

    • Parents of children with a permanent disability or mental disability.
    • Members of the armed forces, including members of auxiliary forces or reservists, serving in the state.
    • Individuals, over 65 years of age.
    • An individual who is physically challenged (also visually challenged).
    • Women exclusively engaged as agent under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings.
    • Parents or guardians of individuals who are mentally challenged
    • Badli workers in the textile industry.

    Why pay Professional Taxes? Benefits

    Here are the reasons why one should never miss a professional tax payment

    It Is A Judicial Requirements

    As per the rules and regulations of India, every employee is bound to make the professional tax payment without fail. 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.

    To Avoid Paying Penalties

    Failure to professional tax registration results in huge penalties that keep on increasing over time.

    Easy To Comply

    When something is easy to comply, it won’t be difficult to follow. The professional tax regulations are so easy to follow that and not difficult to comply with. 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.

    The 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 Rs. 2500 per an annum.

    Professional Tax Registration Process in India

    The professional tax registration procedure is very easy. Here are three important points that one needs to know and understand in detail.

    Varies According To State

    In case you are a business owner and have employees under different states working for you, then you will have to get a professional tax registration for all the states. The tax slab rates can vary from one state to another. This can make it a cumbersome task for small-scale industries. Many states in North India do not have professional taxes.

    The Frequency Of Filing Returns

    The frequency with which one needs to file returns will depend on the state the person resides in. Hence, before filing for a return it is important to know the rules of the state.

    The Penalties That Await

    Professional tax is applicable to all types of business entities. Professional tax can be calculated on the basis of self-assessment. It mainly depends on the professional or employee’s gross income in the half-yearly stage.

    If you are a person who owns a trade or employs staff in your company or is a working professional, then you will have to register at the tax authority of the State’s professional tax department. The employer is also responsible for deducting the professional tax from his/her employee’s salary. The deducted amount shall be paid to the government when the employer files their professional tax return.

    Whether you belong to the category of a professional who is also self-employed or you employ people for your business Buiznest can help you with Professional tax registration. Our Chartered Accountants and taxation professionals will offer you the right guidance and file the returns on your behalf.

    The Maharashtra government, for instance, can levy a penalty of about 10 percent the amount which was delayed. Hence, the more one avoids paying the registration, the more they will have to worry about the penalties.

    Documents required for Online Professional Tax Registration

    Here is a list of documents required to register for professional tax:

    • Certificate of Incorporation, including MOA & AOA / LLP Agreement.
    • PAN card of Company/LLP which is attested by the company director
    • Place of business proof along with a NOC from the owner of the premises
    • Bank account of the company including bank statement and cancelled cheque.
    • Passport size photographs, address and identity proof from all the directors
    • Board resolution or in other words, the statement of consent by the partners.
    • Shop and establishment certificate
    • Salary register and attendance register

    Steps involved in Online Professional Tax Registration

    One Working Day

    Within one working day, you will have to provide your PAN card, address proof and identity proofs of all the directors/partners/proprietors of the company. You also need to furnish the details of all employees working under you.

    Two Working Days

    The application form for professional tax will be then filled up by the employees and then submitted to the concerned authorities by our expert affiliates. If the documents are all provided in order, then the process will not take more than two working days.

    Seven Working Days

    Within five to seven working days, the basic acknowledgment will be provided by us. In case the documents are not in proper order, the inspector will ask for the missing documents. As soon as you provide the missing ones, the process will be completed. The registration hard copy will be issued within 10 days in all the major cities. In other places, it might take up to 15 to 20 working days.

    Comparison Study Between Enrollment and Registration

    Traders and self-employed professionals must apply for Professional Tax Registration Certificate (PTRC) and Professional Tax Enrollment Certificate (PTEC) in their respective states.

    Registration Certificate is required by entities who employ individuals and pay them wages/salary. On the other hand, PTEC is required by traders and self-employed to pay the company’s and director’s professional tax.

    Hence, to conclude professional tax registration is also necessary for people who are employed. Whereas enrollment is necessary for those who own a trade, business or is involved in a profession.

    Understanding the Professional Tax Returns In Detail

    Professional tax is to be filed annually by all the registered employers. The return should be filed with respect to the professional tax which is deposited in the financial year. The wages/ salary of the employees should be taken into consideration while filing the tax returns. The professional tax return should always be filed during the financial year end and it should also offer an opportunity to the employer to correct any omissions or errors made within the due date of submission. Entities and enrolled people need not file any return.

    Understanding the Professional Tax Registration Applicability

    Firms/ Company/LLP

    In the case of professional tax, firms/LLP/corporations/societies/HUF/ associations/clubs/company will be considered as a taxable entity. All the branches involved in these will also be considered as a separate individual in front of the tax payment/ department of professional tax

    Individual People(Professionals)

    The legal practitioners like notaries and solicitors, medical representatives like dentists, medical consultants, doctors, and other professionals like management consultants, tax consultants, surveyors, company secretaries, chartered accountants, insurance agents, engineers, architects and contractors are all considered as 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.

    Employers

    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.

    Tamilnadu Professional tax:

    • For salary range between 3501 and 5000 – Rs. 16.6
    • For salary range between 5001 and 9000 – Rs. 126.67
    • For salary range between 12,501 and above – Rs. 182.50

    How can we help with 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 the form and submit the duly signed form with the concerned department in the respective city or town.

    Registration Process

    The submitted application will then be scrutinized in detail by the particular state government. Once found to be proper and perfect, the professional tax registration will be done.

    FAQs on Professional Tax Registration

    What is dual registration and does every state have a separate registration process?
    While Budget 2019 sprang happy surprises, reducing tax payable for employees earning below 5 lakhs, there are numerous other taxes that continue to be levied on working professionals, the most important one being, Professional Tax. Most employees receiving a fixed salary at the end of a month come across a deduction in their Salary Slip by the name of “Professional Tax.” Unlike the name, it does not come across as a tax on professionals but a tax on employment, trade and profession. It is payable by employees, salaried persons, wage earners and professionals such as Chartered Accountants, Company Secretaries, Cost Accountants, etc. It is a tax levied by the State Government, and hence they have the option to decide whether and how much of PT should be collected. Currently, the following states levy this tax. 1. Punjab 2. Karnataka 3. Bihar 4. West Bengal 5. Andhra Pradesh 6. Telangana 7. Maharashtra 8. Tamil Nadu 9. Gujarat 10. Assam 11. Kerala 12. Meghalaya 13. Odisha 14. Tripura 15. Madhya Pradesh 16. Jharkhand 17. Sikkim
    How professional tax is calculated?
    Professional tax or employment tax is a tax imposed by an Indian state. Each state government of India levies a professional tax on its resident based on his/her employment. It is a deduction that is made from the gross income before computing the tax. Professional tax can be termed as a benevolent and beneficial tax as it is not a part of the direct tax on your income. State Governments charge the professional tax based on certain criteria. Professional tax is deducted from the salary account of the employee.
    Do you want to know if you are eligible to pay the professional tax?
    A tax is a monetary charge imposed on the taxpayer i.e. an individual or a business entity by the state government or any authorized body. The collected charge serves the purpose of funding public expenditure. One of these taxes is the professional tax which was introduced in India in the year 1949. Every earning individual has to do professional tax registration mandatorily.
    Do you want to know everything about the professional tax in India?
    When you have ever taken a look at your payslips or Form16, you will notice that there is a deduction mentioned along with the basic salary and conveyance. This deduction generally ranges up to Rs.200 per month and is termed as a professional tax. Professional tax is applicable in India and generally differs from state to state. However, in a few states, they observe no deduction at all. This article provides you with a clear picture of what is professional tax and when it is applicable in India.

    Why Buiznest

    60 Established Vendors
    Buiznest has successfully completed 600+ registrations in the past year alone. We have partnered with some of the top experts in business across India to get your registration across to you on time.
    9.1 Customer Score
    We make your interaction with the government as smooth as is possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.
    200+ Strong Team
    Our team of experienced business advisors are a phone call away, should you have any queries about the process. But we’ll try to ensure that your doubts are cleared before they even arise.

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