Taxation

All about Gujarat Professional Tax Registration

Gujarat Professional tax is levied by the local municipal authorities on the professionals, and individuals who earn through a profession, employment, or business.

Article 276 clause (2) of the Indian constitution gives the State Government the right to collect professional tax that cannot exceed Rs. 2500 annually on any taxpayer.

In this article, we will look into the details related to professional tax, the process to collect, and the payment mode.

What is Gujarat professional tax?

Professional tax is levied on people who carry out professional trade in India and the employees. The maximum amount that a municipal authority can levy and collect is Rs. 2500 annually on any taxpayer. The amount paid as a professional tax will be deposited to the concerned state government. The amount paid annually as professional tax qualifies for deduction under the Income Tax Act, 1961^[1].

When a person is starting a new business, then some professional tax points are to be kept in mind.

These are:

• The registration application must be submitted within 30 days to the tax department of the concerned state.
• All the staff members appointed must be registered within 30 days of appointment.
• In the case of more than one business owner, the registration must be done separately with the concerned state department.
• All the documents required for registration for professional tax in Gujarat must be submitted.

The payment of professional tax depends upon the salary and income of an individual and the state’s tax slab rates. The tax is deducted from the employee’s salary or income by the company’s owner or business.

In case when the employer has more than 20 employees, then the payment of professional tax must be made within 15 days from a month-end. However, if the employees are less than 20, then the payment can be made on a quarterly basis.

Registration of professional tax

The taxpayer has to apply for registration within 30 days to the concerned state department for the registration certificate. Separate applications must be made in case of the individual has more than one business.

The documents required for professional tax registration are:

The documents required for professional tax registration in Gujarat are:

• Certificate of incorporation as proof of commencement of business;
• Details of employees and salary paid;
• Address proof; and
• Accounting records.

What is the tax slab rate for professional tax?

The state government sets the tax slab rate. It varies from state to state.

The tax slab rate for professional tax in Gujarat is in the table below.

Monthly Income of Taxpayer	Professional Tax Amount Payable
Employees earning upto Rs. 5,999	Nil
Employees earning between Rs. 6,000 to Rs. 8,999	Rs. 80
Employees earning between Rs. 9,000 to Rs. 11,999	Rs. 150
Employees earning more than Rs. 12,000	Rs. 200

Professional tax rate for Individuals & Firms

The tax slab rate for professional tax in Gujarat for individuals & firms is in the table below.

S.No.	Individuals / Firms	Annual Rate of Professional Tax
1	Advocates, solicitors, notary, Doctors, Engineers, Architects, Chartered Accountants, Brokers, contractors, agents, Health & recreation club, etc. and all types of professionals as per the Finance Department notification dated – 1/4/2008.	Rs. 2000
2	Owners of all private & public companies, banking companies, factory, etc.	Rs. 2000
3	Individuals or professionals paying tax separately in more than one branch	Rs. 2000
4	The registered dealers having annual turnover:
	i.            Not exceeding Rs. 2,50,000	Nil
	ii.            In between Rs. 2,50,000 and Rs. 5,00,000	Rs. 500
	iii.            In between Rs. 5,00,000 and Rs. 10,00,000	Rs. 1250
	iv.            More than Rs. 10,00,000	Rs. 2400

What is the application procedure for Gujarat professional tax?

The steps for online registration of professional tax in Gujarat are:

• Visit the web portal of the commercial department of Gujarat (www.commercialtax.gujarat.gov.in).
• Then click on the type of professional tax from the left menu.
• Login using the credentials.
• Select ‘Professional Tax Registration for Employers’ or ‘Professional Tax Registration for Professional’.
• Fill in the details in the form that appears.
• Then submit the form after reviewing the details.
• Acknowledgment receipt will be generated then.

The steps for online payment of professional tax in Gujarat are:

• Log in to the official website.
• Then click on the online payment option and select the professional tax.
• Enter the PEC number in the text box and then click on search.
• The amount due will appear, and then select the suitable mode of payment from the options given and pay the tax online.

The modes of payment for a professional tax in Gujarat can be:

• Net banking;
• Debit card; or
• Credit card.

What is the due date to pay Gujarat professional tax?

No. of Employees	Due Date
Less than 20 employees	Before 15th of the following month
More than 20 employees	Before 15th of the month subsequent of every quarter (for example, 15th October for July to September quarter.)

What is the penalty for the late payment of Gujarat professional tax?

A penalty can be imposed for the delay in payment of professional tax in Gujarat, i.e., 18% p.a. on the unpaid tax computed on a daily basis.

Conclusion

Gujarat Professional tax is not only a tax that is levied by the local municipal authorities on the professionals, but it is also levied on any individuals who earn through a profession, employment, or business.

Thus, it is mandatory for persons to have an income or salary to register for the Gujarat professional tax.

Read our article:All about Assam Professional Tax Registration