Taxation

All you need to know about Telangana Professional Tax Registration

Telangana Professional Tax

The state governments in India, may levy professional tax on the income from profession or the employment. The Telangana professional tax is levied by the state government of Telangana on the salaried individuals or the persons engaged in trade or business or professionals. In the article, we will develop an understanding of the professional tax levied in the state of Telangana.

What is Telangana professional tax?

Professional tax payable in the state of Telangana, is regulated by the Telangana Profession Tax Act, 1987[1] and the commercial taxes department is entrusted with the responsibility to collect the professional tax in the state. The state government can levy maximum of Rs. 2500 professional tax annually and a minimum slab at Rs. 110 per annum.

The salaried persons who are liable to pay professional tax can claim deduction under the Income Tax Act, 1961; whereas, professional tax levied on persons engaged in business or trade, cannot claim deduction.

The individuals who are registered under the professional tax are required to file the return before the 10th of every month.

Who are liable to pay Telangana professional tax?

It can be divided in two parts, i.e., persons who are responsible to pay professional tax and the ones’ who are exempted to pay the professional tax in the state of Telangana.

Persons responsible to pay professional tax

The following are the persons who are eligible to pay professional tax in Telangana:

  • An employer (in case of the employees) deducts and pays the professional tax to the state government;
  • When the employer is a private company, sole proprietorship, partnership firms etc., then it is required to be registered to obtain a registration certificate and to pay professional tax on business or profession; and
  • An individual who is a freelancer and doing business without any employees are also required to be registered under the state legislation applicable.
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Exemptions

The persons who are exempted to pay professional tax are:

  • Individuals above the age of 65 years;
  • An individual who is suffering from the disability which is permanent in nature that includes blindness;
  • Workers in the textile industry;
  • Parents or Guardians of individuals who suffers from mental disability;
  • Members of armed forces, navy, or air force serving in the state; and
  • Members of auxiliary forces or reservists serving in the state;

Types of taxpayers in professional tax

There are 2 types of taxpayers to pay for professional tax. The types are:

The types are:

  • Salaried Individuals

The employer deducts the tax amount as a professional tax from the employees’ salary. The salaried individual under section 16(iii) and can claim for tax deduction under the Income Tax Act, 1961.

  • Self – employed

The self – employed persons need to deposit the professional tax themselves and they cannot claim any deduction under the Income Tax Act, 1961.

What is the tax slab rate for Telangana professional tax?

The tax slab rate for professional tax in case of:

  • Salaried persons

Salary per month

Monthly tax payable

Up to Rs. 15,000

Nil

Between Rs. 15,000 & Rs. 20,000

Rs. 150

More than Rs. 20,000

Rs. 200

  • Professionals

Time period

Tax payable

Up to 5 years

Nil

More than 5 years

Rs. 2500 per annum

What are the documents required for professional tax registration in Telangana?

The following documents are required for registration of professional tax:

  • PAN details;
  • Aadhar Card;
  • The no. of employees and their details;
  • MoA, AoA and certificate of incorporation;
  • Lease agreement (in case the address of the company is rented);
  • Bank details with a cancelled cheque; and
  • Address & ID proof of the employer along with their photo;
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What is the procedure to register for Telangana professional tax?

These are the steps to be followed for registration of Telangana professional tax:

  • Visit the official website of the commercial tax department of Telangana
  • Select the option of e- registration available on the homepage.
  • Then select professional tax from the drop-down menu.
  • On the next page the user or the applicant needs to sign in by using the credentials and then click on submit.
  • If a user is already registered under previously applicable indirect taxes, then the website will automatically download the data in the form and in case the user can edit the data if required and click on submit the application.
  • In case of a new user, the applicant needs to enter all the information asked and then click on submit.
  • After the verification of all the details, click on next icon.
  • A reference number will be generated for future use.
  • Enter the details of owner or the managing partner in the next page that appears.
  • Enter the details of authorised person (if applicable) otherwise click on no.
  • Enter the bank details and click add, the user can add more than one account in the application.
  • Then enter the details of any additional place of business (if any) and click on next.
  • After the verification of all the details, the applicant can click on finish for successful registration.

What are the consequences in case of professional tax?

In case of Non-payment of professional tax, the penalty imposed is between 25% and 50% of the tax amount due, after giving him an opportunity of being heard.

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Conclusion

The professional tax in Telangana is levied on persons’ income, whether it is salary or from the business or trade. The State Government of Telangana has prescribed tax rate slab for individuals & professionals to determine the professional tax payable. The paying of professional tax is determined on various factors that are mentioned in the article.

Read our article:West Bengal Professional Tax Registration: Here’s all you need to know

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