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Professional Tax

Professional Tax Becomes Applicable in The State of Punjab –

The article below will take you through the details of professional tax which has become applicable to businesses in Punjab.

The direct or professional tax applies to folks who earn their livelihood from work, labour, professional careers, or business. Currently, the working class encompasses teachers, solicitors, medical professionals, etc. Taxes are withdrawn from the employees’ monthly salaries and submitted to the state. 

The working people who are not paid employees pay their taxes directly to the state. The professional taxi that certain occupations paid through the financial year might be deductible per the 1961 Income Tax Act. Is it mandatory to pay professional tax? You will get the answer at the end of this article.  

Registration for Professionals Tax

In the timeframe of a month for recruiting new employees, every company must register with the IRS as a professional. Registration is needed for other occupations within 1 month of the starting of their service. In case the company has numerous branches, registration should be done for every branch under the laws of each state.

Interpreting the sign-up process for every state where professional tax are applicable might be challenging for employers.  

Professional Tax Registration Certificate

  • Mandatory Registration: Every enterprise will get the Professional Tax Certificate of Enrolment from the Profession Tax Officer 1 month from the date the company operations began.
  • Professional Registration Tax: With the sign-up procedure, every employer must pay a professional tax of 2500 INR.
  • Submission of Yearly Professional Taxes: Each registered enterprise must pay 2500 as an annual professional tax guide in April. 

Appointment Appellate Authority Commissioner and Other Officers

  • The entire Punjab state falls within the jurisdiction of the Commissioner.
  • The Commissioner might, by specific request, assign any of their responsibility and powers under this Act to any official designated under subsection, under any constraints that might be imposed.
  • The administration might designate an Appellate Authority, an officer to perform as the Commissioner. The other authorities will assist him as they consider him apt to carry out the stipulations of this Act. 

Levy and Charge of Tax

  • All individuals involved in any job, business, or occupation and belonging to any category stated in the Schedule will have to pay the tax at rates listed in the Schedule. Therefore, according to the Income Tax Act, senior citizens are not required to pay taxes.
  • A tax on occupations, callings, employments, or services shall be levied and received per the stipulations of Article 276 of the Indian Constitution and this legislation.
  • Only those whose taxable wage for a similar fiscal year prior to authorising deduction on account of tax imposed under the Income Tax Act surpasses the maximum amount. This amount is not chargeable to income tax returns through the amount of tax receivable by the person under this legislation for the applicable fiscal year. It’ll be subject to the taxes levied by this Act for that fiscal year.

Registration and enrolment

  • In the 60 days of the commencement of this Act, any enterprise mandated to pay tax under Section 4 should secure a registration certification from the authorised official in the form specified. Considering that the government might exempt any person or group from procuring a registration certificate under this Act.
  • Moreover, a cancellation of the obligation to obtain a registration certificate does not imply a cancellation of the liability to pay the tax imposed by this Act.
  • Those needed to pay tax under this Act (besides individuals getting a salary, for which the tax is the employer’s duty) shall obtain a certification of registration from the authorised representative in the manner prescribed.
  • The authorised or designated authority must state the taxable amount by the holder of each registration certification. Also, such a certificate must be considered a notification of demand for Sec. 12.


All persons registered under this Act should self-assess their tax payments and finalise a return to the authorised representative. They outline the per year gross income of these persons through their occupation, trade, or employment for the preceding year or a chunk of it, along with any tax payments they might have been obliged to pay.

All the professionals signed up under this Act must make their tax evaluations and file a return to the authority in the format for the time frame. The filed tax should incorporate details on their salaries and wages. It also encompasses the tax amount they have levied regarding those earnings.

Payment of Tax

The tax payable from companies mandated to defer it from employees should be paid monthly within the stipulated time frame and in the form prescribed. Within one month, just after the end of each month, enrolled individuals need to pay the tax amount payable from them every year as represented on their registration certificate.

Consequences of Failure to Deduct or to Pay Tax

There are cases when a company cannot levy the tax while paying the salary or, following the deduction, fails to pay the tax amount as per this Act. As a result, the company, without being biased to any other consequences and liabilities, along with tax amount, simple interest at a 2% rate of the amount of tax payable (monthly) or fraction of a month for the time for which the tax is due.

Without impacting any other repercussions or obligations he may encounter, an individual who neglects to pay tax as necessary by or under this Act will be responsible for paying simple interest at a 2% rate of the amount of the taxes owing for each month or chunk of a month for the period for which the tax remains due and payable.

Recovery of Tax, Interest as Arrears of Land Revenue

Any person’s tax, fine, and interest debts due under this Act shall all be recovered as property tax arrears.

The regulations of the Punjab Value Added Tax Act, 2005 relating to recovery shall be applicable mutatis mutandis to this Act to execute payment of the sum of tax, penalty, and interest due from any individual by or under the provisions of this Act, as debts of land revenue.


What is the professional tax rate in Punjab?

The professional tax Punjab rate is 2% of the taxable income under the Income Tax Act, 1961. However, the maximum professional tax payable is ₹2500 per annum.

Who is eligible for professional tax in Punjab?

Any person engaged in any trade, calling, profession, or employment, who is an income tax payee (i.e., whose taxable income under the Income Tax Act, 1961 is more than ₹ 0), is liable to pay professional tax in Punjab.

How do I calculate my professional tax?

To calculate your professional tax, multiply your taxable income under the Income Tax Act, 1961 by 2%. However, the maximum professional tax payable is ₹2500 per annum.

What is the tax of professional tax?

Professional tax is a direct tax levied by the state government on the income of individuals engaged in any trade, calling, profession, or employment.

What is the monthly PT slab in Punjab?

The monthly PT slab in Punjab is as follows: Monthly income: ₹7501 - ₹. 10000 - PT: ₹ 175 Monthly income: ₹ 10001 - ₹15000 - PT: ₹200 Monthly income: ₹15001 ₹20000 - PT: ₹225 Monthly income: ₹20001 and above - PT: ₹250


For more details on Professional Tax, you can contact the top legal professionals of Vakilsearch. Get all the relevant information regarding the same from our experts. Please book your appointment with us today. 

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