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Professional Tax

What Are the Categories of Professional Tax?

Individuals who make a living through employment, the practise of a profession, or business are subject to the direct tax known as professional tax.

Individuals who make a living through employment, the practise of a profession, or business are subject to the direct tax known as professional tax. Professionals who are currently in practise include doctors, teachers, lawyers, chartered accountants, etc. Lets see the Categories of Professional Tax below.

Employers withhold the tax from employees’ monthly paychecks and deposit it with state governments. Other than paid employees, professionals pay it directly to the government.

According to the Income Tax Act of 1961, certain professions may be able to deduct the professional tax they paid throughout the fiscal year. In this blog, we will delve into the categories of professional tax. 

Professional Tax registration 

All employers are required to register as professionals with the IRS within 30 days of hiring new employees. The registration is required for other professions within 30 days of the commencement of their practice.

If the employer has many locations, registration must be requested for each location in accordance with the laws of the individual states.

Employers may find it difficult to grasp the registration procedures of all the states where professional taxes are relevant.

Professional Tax Registration Certificate

  • Mandatory Registration

Within thirty days of the date on which company operations began, each business entity must receive the Professional Tax Certificate of Enrollment (EC) from the Profession Tax Officer.

  • Registration Tax for Professionals

Each employer must pay Rs. 2500.00 in professional tax upon registration.

  • Annual Professional Tax Payment

Each year in April, every registered Employer must pay a professional tax of Rs. 2500.00.

Process for Professional Tax employer registration

  1. Registration / Incorporation of a Business

Register the company as a sole proprietorship, partnership, limited liability company, or other legal entity.

2. A request to the department of professional taxes

Send the Professional Tax Department your online Employer Registration (Enrolment Certificate) application together with any necessary supporting documentation.

3. How to Get an Enrolment Certificate (EC)

After submitting your application, send Depart your supporting documentation so that you may get your Certificate of Enrollment (EC)

Categories of Professional Tax 

States and Union Territories that do not pay professional tax

Following are some of the Indian states and union territories where no professional tax is applicable:

  1. Arunachal Pradesh
  2. Himachal Pradesh
  3. Delhi
  4. Haryana
  5. Uttar Pradesh
  6. Uttarakhand
  7. Andaman and Nicobar Islands
  8. Daman & Diu
  9. Dadra and Nagar Haveli
  10. Lakshadweep
  11. Jammu & Kashmir
  12. Punjab
  13. Rajasthan
  14. Chandigarh
  15. Goa

Professional tax slabs

The slab rates differ from state to state. Currently, the professional tax is applicable to 16 states in India and is levied on its local authorities.

The chart below exhibits the highest professional tax slab rates in various states of India.

State Gross monthly salary (Rs.) Tax per month (Rs.)
Gujarat 12,000 and above 200
Maharashtra 10,000 and above 200 (300 for February)
Odisha 20,000 and above 200
Chhattisgarh 25,000 and above 200
Madhya Pradesh 15,000 and above 212
Bihar 83,000 and above 208
Karnataka 15,000 and above 200
Telangana 20,000 and above 200
Tamil Nadu 12,500 and above 182
Andhra Pradesh 20,000 and above 200
West Bengal 40,000 and above 200
Assam 25,000 and above 208 (212 for February)
Sikkim 40,000 and above 200
Meghalaya 41,667 and above 208 (212 for February)
Tripura 15,000 and above 208 (212 for February)
Kerala 20,834 and above 208

Consequences of non-compliance with regulations

The real penalty is determined by the professional tax regulations of each State. Businesses who fail to register, pay taxes late, or fail to file returns by the deadline may be subject to fines, late fees, or interest.

For instance, the state of Karnataka levies interest of 1.25 percent per month on any unpaid taxes. West Bengal imposes annual fees of 12 percent.

If an employer fails to pay the tax while having a “Certificate of registration,” they will be fined. The government charges interest when professional taxes are not paid on time or are paid late. (provigil online cheap) Therefore, it is wise to estimate your taxes and make preparations in advance to prevent fines. If not, the following results may occur:

When a payment is made after the due date, interest at a rate of 1% to 2% per month is assessed.

Additionally, a state may apply a penalty on the total amount owed that ranges from 10% to 50%.

If the information given by the person is false, they will be required to pay a tax that is three times greater.


The general regulations controlling the professional tax may change sometimes. Therefore, it is advised to consult with professionals in professional taxation before trying a professional tax.

If you require any help in deciding if professional tax is mandatory for business, Vakilsearch would be pleased to assist you. To ensure that people have reasonable expectations, we give them clarity on the registration procedure. At the lowest possible cost, our experts will guarantee your smooth transaction.

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