Professional tax is paid to an individual working in India to the state government where the citizen resides. There are many doubts regarding professional tax. Hence the FAQs are answered efficiently. One must pay the taxes on time and make the taxation process quick. Delay in the professional taxes can lead to penalties and may impose interest rates on the tax to be paid.
The professional tax is imposed by the state government of different Indian states. Working-class professionals like engineers, teachers, accountants, artists, etc., should pay this tax to the state government. There are different taxes as well based on the different types of occupations.
One must make sure to pay the taxes on time to avoid penalties and interest rates on the taxes. In states like Karnataka, the interest rate on late tax payments is 1.25%, and the penalties can even range up to 50% of the total tax amount. Hence, one must try to avoid late payments of taxes.
The calculation of this tax differs from state to state. And each state has different tax slabs per its rules and regulations. This tax is paid in twelve monthly installments. The installment in February is the highest, as it is the month of inception.
The following are some frequently asked questions (FAQs) that will help get more detailed information to one’s queries.
FAQs – Professional Tax Registration
The following are the FAQs about professional tax registration, which will help solve many significant doubts.
- Who is supposed to pay professional tax as an employer?
Every employer is supposed to deduct the professional tax from the employee’s wages or salary and pay it to the government, as per the Profession Tax Act.
- Who is required to get the Certificate of Registration (RC)?
Every employer who pays the professional tax to the government by acquiring it from the employees is supposed to get a Certificate of Registration (RC).
- When does the employer become liable to pay the tax?
The liability date is when the employer pays the wages to the employees and collects the tax by deducting it from the salaries for the first time.
- What comes under the scope of wages and salary?
Salary or wages includes the basic payment, dearness allowance, house rent allowances, and other remunerations paid to an employee regularly. This also includes the other incentives and the profits earned regularly for more than 180 days.
- What is the specified time the employer can pay professional tax?
The employer can pay the tax by the 21st day of the following month. In case of any delay in the tax payment process, it can lead to interest on the tax, which can be more than 1%.
- How can an individual pay professional tax?
One can pay the tax with the help of the GRIPS portal. The employer must pay the tax after getting the certificate of enrollment from the GRIPS portal against the registration number.
- On obtaining a certificate of registration, should the individual file return?
Yes. After getting the certificate of registration, the individual must file a return.
- On obtaining the registration certificate, how can one file a return?
One can file the return online with the help of a specific website. Also, one must submit a hard copy after paying the tax. Late submission results in a penalty of INR 200 for the first month; later, it is kept constant and is INR 100.
- What categories of people are supposed to pay the tax?
The people of the following categories are liable to pay the taxes: – firm, company, Hindu undivided family, society, corporation, club, association, or some other corporate body.
- If the employer is registered under MVAT Act, is it necessary to register for the professional tax Act?
Yes. An employer must register for the tax Act who has registered for the MVAT Act. But he must have employed one or more persons with a salary of more than INR 5,000.
- What is the last date to obtain the certificate of registration from the employer?
Per the rules and regulations, the last date to apply for the certificate of registration is the thirtieth day from the day the employer becomes liable to pay the taxes.
- What are the penalties for filing wrong information?
The penalties under section 5(6) as per the professional tax Act impose that an individual is supposed to pay three times the tax as a penalty to the state government, for filing wrong information.
- How much professional tax is to be paid by an individual?
The professional tax is to be paid based on rule 2(7) of the professional tax Act.
- What is the specified interest rate for late payments?
For the tax, which is paid late, the interest rate is 1.25% per month of the taxable amount.
- Are self-employed persons supposed to get the enrolment certificate?
There are specific occupations for which self-employed workers are supposed to get the enrollment certificate, and certificate of registration, and pay the taxes on time.
- Are medical practitioners supposed to pay professional tax?
Yes. They are also supposed to pay professional tax based on their taxable limits.
- What is the facility to make lump sum payments for the professional tax?
Yes, the employer can pay a lump sum tax for a couple of years, and get benefits based on it. this depends from state to state as per the different laws.
- Who is examined under the professional tax Act?
The employer of a firm is examined in the Professional Tax Act.
- Can parents of physically handicapped children get an exemption from the professional tax?
Yes, the parents and guardians of physically handicapped children are exempted from the tax.
Hence, this was detailed and brief information about tax and the different frequently asked questions (FAQs). The government website can get more information about the tax and the professional tax Act. Also, an employer or a self-employed individual can take guidance from a legal firm about tax and get the latest and updated tax information.
There are many law firms present online. But there is an Indian law firm called ‘Vakilsearch’ that can help in getting more knowledge about these taxes and their different norms. This firm can also help file an ITR, legally save taxes and many other services. Vakilsearch is India’s leading legal, tax, and compliance services platform.
They have worked with more than 50,000 customers giving them positive results. They also have registered at least 10% of the total Indian companies. Hence, this makes their services more trustworthy and efficient. With their team of highly qualified lawyers, charted accountants, and many other professionals, they can help in solving any legal, taxation, or compliance issues efficiently.