Professional Tax Registration

 Professional Tax Registration

Professional Tax is a tax levied on professions and trades by the various State Governments of in India. It is a state-level tax. So it has to be compulsorily paid by every member whereas who working in government or non-government entities, or in practice of any profession, such as CAs, Lawyers, Doctors, etc. or carry out some form of business, are required to pay this professional tax. Professional tax is usually a slab-amount which is based on the slabs.l.

 Different states have different rates and methods of collecting Professional tax and It is not imposed in all states. The states which have to impose a professional tax are  Karnataka,  Assam,  Chhattisgarh, Andhra Pradesh, Gujarat, Meghalaya, Maharashtra, Madhya Pradesh, Odisha, Sikkim, Tamil Nadu,  Kerala, Telangana, Tripura, and West Bengal. Professional Tax is deducted from the salary of the salaried employees by the employers and In case of other class of Individuals, this tax is liable to be paid by the person himself. 

Professional Tax is a tax imposed by some of the state governments in India on persons earning income from salary or practising professionals such as Chartered Accountant, Company Secretary, Lawyer, Doctor etc. The state government derive the power to impose a professional tax under Article 276 of the Constitution of India. The professional tax is levied by particular Municipal Corporation; however, the Parliament of India has placed a ceiling of Rs. 2,500/- as the maximum amount which can be collected as professional tax in the year. The professional tax is based on the slab which differs from state to state. In the case of employees it is deducted from salary by the employer which then deposit to the professional tax department, however in case of company, Director of a Company, LLP, designated partners or partners of LLP, partnership firm, individual partner, self-employed professional or owners of any business the professional tax depends upon gross turnover in the preceding year

Some Facts about Professional Tax Registration

In case of salaried and wage earners, the professional tax is liable to be deducted by the employer from the salary/wages and the same is to be deposited to the state government

In the case of other class of individuals, this tax is liable to be paid by the employee himself

The professional tax is a slab-based amount on the gross income of the professional

Professional tax is not levied in Delhi

There is two type of forms for Professional Tax Registration Forms:

• First is Form I- For an employer
  
• Second is Form-II- For a self-employed person
  

What is included in our Package

Reasons to Obtain Professional Tax Registration

Statutory Requirement -Employers in some states are required to mandatorily get professional tax registration for deducting and pay service tax on the behalf of employees.

Avoid Penalty- if you Failure to obtain professional tax registration or submit professional tax could result in fines and penalties that cause over time.

Tax Deductible- A deduction from salary can be claimed by the taxpayer on account of professional tax paid. The deduction for professional tax will be allowed in the year in which the tax is actually paid by the employee.

Easy Compliance- Compliance with professional tax regulation is very easy. Professional tax registration can be obtained easily and compliance can be maintained easily.

State Government Tax- State Governments and Local Authorities are empowered to collect professional taxes on professions, trades, callings and employment. The amount of professional tax collected amount does not exceed Rs.2500 per annum.

Required Documents for Professional Tax Registration 

Procedure for Professional Tax Registration