Know whether you are required to Pay Professional Tax or Not?

Narendra Kumar

29 Jun, 2023

Professional tax is imposed by the state government via article 276 of the Constitution of India and varies from state to state; every state derives this right to impose pay professional tax on the professionals like doctors, CA, CS lawyers and others. However, the maximum ceiling to this is Rs 2500/- annually. The professional tax is levied by the Municipal Corporation^[1] of the respective city.

One needs to pay attention to the fact that in the case of other class of individuals, the professional tax is liable to be paid by the employee himself/herself. The professional tax is imposed basis a slab-amount on the gross income of the professionals required to pay professional tax.

Rules and Regulation

1. Under Article 226(2) of the constitution of India, every person engaged in any trade, profession , employment and falling under the classes as mentioned in the 2^nd class of the schedule ; pay the Professional Tax at the rate as prescribed by the state and however it must not exceed the maximum limit of the Rs 2500/- annually.
2. Basis the protocol there are two kinds of the Professional tax certificates that a company needs to obtain i.e. PTRC and PTEC, one is for professional tax registration certificate is required for its role as employer and the other one in order to deduct the professional tax of the employees from the salary.
3. Within 30 days of such applicability to the individual or company or as the case may, the employer shall obtain “Certificate of Enrollment”.
4. An employer required to obtain the professional tax certificate, in the case does not obtain the certificate can be penalized for the same.
5. In case the company has its presence in different places than in that case the company is required to take registration in different registration for each such place.
6. Foreign employees are exempt from the professional tax registration or payment of the professional tax.
7. Indians employed by the Foreign diplomatic office, or embassy or consultant are not required to take the certificate of registration, hence the rules and regulation applicable to the Indian employee’s such professionals are not applicable in such cases.

Penalty:

1. Breach of rules peripheral to the professional tax: In case of breach of the rules of professional tax, the penalty of 2% per month for the delay in making payment is imposed. In case of further delay for non-payment, a 10% additional penalty is imposed.
2. Delay in obtaining the certificate of the Enrollment: Such delays attract a penalty of Re.2 per day If the information provided to obtain Certificate of enrollment was false or wrong in whatsoever manner then the 3 times the amount due is payable in the form of penalty.
3. For late return filing: the Certain state has imposed Rs 300/- for every such delayed return.

 Chargeability:

In case of the company, LLP, designated partners or partners of LLP, partnership firm, individual partner, self-employed professional or owners of any business the professional tax is charged on the basis of the gross turnover in the preceding year.

Usually, the professional tax is charged by the government on the income from salary or practicing such professions say like doctors, CA, CS lawyers and others. The person obligated to seek such professional tax registration is required to ensure that the professional tax is deducted from the salary of the employees.

When to Obtain the Professional Tax Registration?

One needs to take the registration under a professional tax of a particular state within 30 days of coming under the purview of the applicability of professional tax.

Return of Professional Tax:

The professional tax collected from the employees should be deposited in the appropriate office designated by the state government and a return of professional tax must be filed specifying the payment of pay professional tax.

Also, Read: Know whether you are required to Pay Professional Tax or Not!.

Applicability of Imposition of Professional Tax varies from state to State:

The imposition of the professional tax rate is different from state to state, however with a cap of Rs 2500/- in a year. Apart from professional tax rate, the coverage also differs from the state to state, for example, the pay Professional Tax in Maharashtra is applicable in both the case of salaried and self-employed professionals to earn while working in government or private organization or under any other mode of employment. However, in Delhi Professional tax is not applicable.

Procedure:

One needs to apply online and the scanned copy of documents has to be sent via mail.

What is the usual time taken for the Professional Tax Registration?

It is usually a maximum of 4 days.

States in which Professional Tax is Applicable:

Following are the states wherein the PROFESSIONAL TAX is applicable:

1. West Bengal
2. Anadra Pradesh
3. Assam
4. Bihar
5. Gujarat
6. Karnataka
7. Kerala
8. Orissa
9. Madhya Pradesh
10. Meghalaya,
11. Tamil Naidu,
12. Telangana,
13. Tripura

Our Services:

1. Tax consultation
2. Professional tax registration
3. Return filling of the Professional tax
4. Government liaison
5. Documents

The Procedure to obtain the pay Professional tax certificate is completely online the expert team of Enterslice is engaged in providing end to end solution with regard to registration to after registration compliances including returns. In case you need any expert opinion or learn more Clicks here to contact.

See our Recommendation: All Types of Income Tax Return Filing In India.