Professional Tax In India: Registration, Payment And Return Filing

Published on 07 Feb 2019 by Shivi

The taxes in India are categorised as direct taxes on the income earned by an individual and indirect taxes imposed on the goods and services availed by an individual. One such direct tax is Professional Tax.

Professional Tax is a state-level tax that applies to salaried employees and professionals, including chartered accountants, lawyers and doctors. Registration is mandatory within 30 days of employing staff in a business or, in the case of professionals, 30 days from the start of the practice. This tax needs to be deducted from the salary or wages paid. Professional tax is levied under Article 276(2) of the Indian Constitution and the amount varies by state.

The maximum amount payable towards professional tax is INR 2,500 in a year. The professional tax is usually a slab-amount based on the gross income of the professional. It is deducted from the income received by the professional every month. The state governments of the following states have levied professional tax- Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh.

In case of salaried and wage earners, professional tax is liable to be deducted by the employer from their salary or wages and the employer is liable to deposit the same with the state government. In case of other class of Individuals, this tax is liable to be paid by the person himself.

Professional Tax Registration In India

Any person engaged in Business, Trade, Professions, Callings and Employment needs to obtain a Professional Tax Enrollment Certificate (PTEC). A person liable to pay Professional Tax is required to apply for enrolment in the respective State, wherein the business is carried on. All the relevant details related to business along with information of business branches located in the State must also be provided along with payment of Professional Tax as per the schedule. If a business fails to do so, it may be liable for a fine, penalty or even imprisonment as per the provisions of the Act.

Any Employer liable to deduct Professional Tax from the salary or wages of the employees needs to obtain a Professional Tax Registration Certificate (PTRC). Such an employer is required to apply for a certificate of professional tax registration and file the application for the same within the stipulated time frame allowed for the purpose. Failure to obtain registration within the specified time frame may attract fine, penalty or even imprisonment as per the provisions of the Act.

Documents Required For Professional Tax Registration And Enrollment

The documents required to obtain professional tax registration or enrollment certificate include the following:

  • PAN Card copy of the assessee.
  • Aadhaar Card copy for proof of identity.
  • Cancelled Cheque of the current account held in the name of applicant.
  • Passport size photo.
  • Latest electricity bill or rent agreement for the register office or place of business for proof of address.
  • Digital Signature of the applicant.
  • Details of the business.
  • Number of employees employed at workplace.
  • Date of commencement of business.
  • Email ID and Mobile number of the assessee.

READ: TDS Return Filing In India

Professional Tax Payment

Professional Tax can be paid online or offline mode in accordance with the payment modes provided by the competent State authority. An enrolled entity or person needs to pay the Professional Tax within the current financial year or the date notified for the same. The registered employers are required to pay the tax on a monthly or semi-annual basis on behalf of the employees. In case of non-adherence, interest and penalty are levied.

Professional Tax Return Filing

All registered employers are required to file a Professional Tax return on annual basis. The Professional Tax Return is filed for the tax deposited during the financial year with regards to employees who receive salary or wages. The professional tax return is filed at the end of the financial year and allows an employer to correct any errors and omissions, if any, within the due date. However, enrolled persons and entities are not required to file any professional tax return.

Legistify connects you with the best accounting experts who can help you with your professional tax payment and return filing. You can connect to the best CA/CS experts online in India by calling us at 846-883-3013 or sending us an email at [email protected].


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