Professional tax is a tax that is imposed by state governments on all salaried individuals. Professional tax is applicable to all working professionals, such as 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 ₹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 for self-employed: Any professional who obtains a monthly regular income will need to pay the professional tax. By the word professional, we mean people employed in specialized fields such as accountancy, media, etc.
The professional tax rules provide exemptions for a few individuals; the exemptions are different based on the state you belong to. The professional tax rules provide exemptions to the following individuals:
Here are the reasons why one should never miss a professional tax payment
In the case of professional tax, firms, LLPs, corporations, societies, HUFs, associations, clubs, and companies are considered taxable entities. All the branches involved in these will also be considered separate individuals under professional tax.
Legal practitioners such as notaries and solicitors, medical representatives such as dentists, medical consultants, doctors, and other professionals such as management consultants, tax consultants, surveyors, company secretaries, chartered accountants, insurance agents, engineers, architects, and contractors are all considered 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.
Within 30 days of the company's incorporation, the company/firm must get a professional tax enrollment certificate (PTEC) by registering on the government portal.
The company/firm must have a professional tax registration certificate (PTRC) within 30 days of employing a staff member.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.
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.
We at Vakilsearch are ready to assist you whenever you need. Here are some of the ways in which we can help you with online 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 out and submit the duly signed form with the concerned department in the respective city or town.
The submitted application will then be scrutinized in detail by the relevant state government(s). Once found to be proper, your professional tax registration is done.
Professional Tax Enrollment Certificate
Professional Tax Registration Certificate
Direct taxes are taxes imposed on income, capital gains and net worth. Gift tax, death duties and property tax are also considered direct taxes.
Double taxation is juridical when the same person is taxed twice on the same income by more than one state. Double taxation is economic if more than one person is taxed on the same item.