Understanding Madhya Pradesh Professional Tax Registration

Understanding Madhya Pradesh Professional Tax Registration

The professional tax is calculated according to the monthly salary slab of an individual. Such tax is charged by deducting from such person’s income on a monthly basis. The collection of this tax and the levy rate may differ between state to state, provided that this tax is charged by the respective state governments. Professional tax registration is highly essential. Not every state has adopted this taxation system but only a few of them, including Madhya Pradesh. In this article we shall discuss Madhya Pradesh Professional Tax.

What does the constitution say regarding this?

As per the article 276 of the Indian constitution[1], there shall be levied and collected a tax on professions, trades, callings and employment. Each persons engaged in profession, trade, calling and employment and falls under one or the other classes stated in the second column of the schedule would be liable to pay state government tax as per the rate stated against the class of such persons. Further, the entry 23 in the schedule will apply only to classes of persons as specified by the state government.

Deduction of professional tax

Professional tax for salaried employees should be deducted by the employer from the remuneration of the former, and the deducted amount should be deposited to the department concerned of the government.

Moreover, the concerned employer should produce a return for the amount so deposited. The tax return should also comprise of tax payment proof. It may be noted that the return would be nullified in case where the payment proof is not enclosed. Self employed individuals should remit their own taxes by registering under the provision.

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Payment Regulations

The commercial tax department of states is given the task to collect professional tax. Those employers who attained the tag of designated authority of the state government can remit their taxes in the treasury through banking challan. Other may do the same at the payment venue decided by the concerned authorities.

As far as the payment timeline is concerned, employers with more than 20 employees can remit their payments in 15 days from the end of the month. Employers with less than 20 employees should make their payments on quarterly basis, which means 15th of the coming month from the end of the quarter.

Madhya Pradesh Professional Tax Registration: Tax slab of Madhya Pradesh

State government rely on the gross salaries to determine the liability of professional tax. Tax rates for Madhya Pradesh has been provided in the table made below:

  Below 18,750 rupees  No tax levied
  Between 18,750 rupees to 25000 rupees  125 rupees
  Between 25000 rupees to 33,333 rupees  167 rupees
  More than 33,333 rupees  208 rupees

Exemption from paying professional tax

Professional tax shall not apply for:

Exemption from paying professional tax
  • Assessees of more than 65 years of age;
  • People suffering from 40% or more permanent disability or blindness;
  • Parent or guardian of physically challenged or mentally retarded child.

What are the advantages of Madhya Pradesh Professional tax Registration?

The advantages are as follows:

  • Statutory requirement-

Employers in states can obtain professional tax registration and deduct then pay service tax on the behalf of employees.

  • Avoid penalty-
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Failure in obtaining professional tax registration can result in penalties being levied therefore, by obtaining this Registration, one can avoid paying hefty fines and penalty.

  • Easy Compliance-

Complying with this sort of tax registration is easy. It can be obtained easily, and also compliance can be maintained easily.

What are the documents required for Madhya Pradesh Professional tax Registration?

The following documents, in case of companies as well as LLP/Partnership, are required:

For Companies-

  • Memorandum of Association (MOA);
  • Articles of Association (AOA);
  • PAN Card;
  • Details of Bank account;
  • Lease Agreement;
  • Name and activities of the firm or organization;
  • List of Employees with their salary details;
  • Address proof and ID proof and photos.

For LLP/Partnership-

  • PAN of LLP/Partnership firm;
  • LLP Agreement/Partnership Deed;
  • Cancelled cheque and bank statement;
  • List of Partners;
  • Partners’ photograph;
  • Aadhar card of partners;
  • Partner agreement for application to enlist under Professional tax.

Madhya Pradesh Professional tax Registration- Consequences

In this sort of tax registration, there are certain consequences that should be avoided:

  • In case of failure to get registration, such person shall be liable to a penalty for the period during which they remain unregistered.
  • In case of failure to deposit to the government/late deposition, such person shall be liable for a penalty.
  • In case of non-deposition of the amount, the officials shall have the power to recover such amount with applicable penalty and interest from the assets of the defaulter. Further, the officials can attach his bank account, and in serious cases, a prosecution case can also be filed.
  • In case of falsified information or incorrect information, a penalty, thrice the liability of the professional tax shall be levied.
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Businesses in certain states should obligatorily acquire professional tax registration, deduct and pay service tax on employees behalf. Failure to get this registration or remit Madhya Pradesh professional tax can invite fines and punishments. States like Punjab, Karnataka, Bihar, Madhya Pradesh, Maharashtra, Tamil Nadu etc., have enforced this form of taxation.

Read our article:All about Gujarat Professional Tax Registration

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