Professional Tax Registration

Professional Tax Registration Certificate and Compliance

Professional tax is a direct tax levied on persons earning an income by either practicing a profession, employment, calling, or trade. Unlike income tax imposed by the Central Government, professional tax payment is levied by the government of a state or union territory in India. In the case of salaried and wage earners, the professional tax is liable to be deducted by the Employer from the salary/wages, and the same is to be deposited to the state government. In the case of other classes of individuals, this tax is liable to be paid by the employee himself. The tax calculation and amount collected may vary from one State to another, but it has a maximum limit of Rs. 2500/- per year. To comply with these rules, the P tax registration must be completed by the respective entity without fail.

Get expert help from LegallensIndia for seamless professional tax payment based on your state's rules and regulations!

Professional Tax Applicability

This tax is levied on all kinds of professions, trades, and employment. Professional tax payment is applicable to the following classes of persons:

The professionals earning an income from salary or other practices such as a lawyer, teachers, doctors, chartered accountants, etc. are required to do P tax registration, obtain P tax certificate and pay professional tax.

Professional Tax Applicable States across India

Please refer to the following table to know more about the states which impose PTRC registration in India:

These are the applicable and non-applicable states subjected to registration and obtain Professional tax number.

Professional Tax Rate

The maximum amount payable per annum towards professional tax is INR 2,500. The professional tax is usually a slab amount based on the gross income of the professional. It is deducted from his income every month.

The Commercial Taxes Department of a state/union territory is the nodal agency that collects professional tax on the basis of predetermined tax slabs which vary for each state and union territory. The tax is calculated on the annual taxable income of the individual; however, it can be paid either annually or monthly.

Who Pays Profession Tax?

In the case of Salaried and Wage-earners, the Professional Tax is liable to be deducted by the Employer from the Salary/Wages, and the Employer is liable to deposit the same with the state government.

Self-employed persons who carry out their profession or trade on their own and fall in the ambit of profession tax are liable to pay the tax themselves to the state government. This class of people must done the registration and obtain Professional tax number. 

Employer’s Responsibility for Professional Tax

The owner of a business is responsible for deducting professional tax from the salaries of his employees and paying the amount so collected to the appropriate government department. He/she has to furnish a return to the tax department in the prescribed form within the specified time. The return should include proof of tax payment. In case of not enclosing the payment proof, the register will consider the return incomplete and invalid. Thus, all the entities with a professional tax enrollment certificate must pay the professional tax in the specified time.

Exemptions for Professional Tax Payment

There are exemptions provided for certain individuals to pay Professional Tax under the Professional Tax Rules. The following individuals are exempted from paying Professional Tax and PTRC registration:

Professional Tax Registration Certificate and Compliance

P Tax registration for professionals 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.

Due Dates for Professional Tax Payment

If an employer has employed more than 20 employees, he is required to make the payment within 15 days from the end of the month. However, if an employer has less than 20 employees, he is required to pay quarterly (i.e. by the 15th of next month from the end of the quarter).

Professional Tax Return

The Professional Tax Return is to be filed by all the persons who are subject to professional tax and the due dates for filing of such returns vary from State to State.

Benefits of Professional Tax Registration

The benefits of P tax registration for professionals are given below.

Documents required for Professional Tax Registration

How to Register for Professional Tax?

Professional tax registration process: The process for fulfilling professional tax obligations varies by state. Additionally, filing deadlines for these taxes also differ depending on state regulations. Professionals/Employers required to follow the procedures outlined below for how to register for professional tax and pay the tax.

Penalties Related To Professional Tax Registration

When professional tax policy becomes applicable, all such jurisdictions may impose a penalty for failure to register Profession Tax. However, the precise amount of the Penalty will depend on state regulatory law.

There are also penalties for failing to submit the PT return by the deadline and withholding payments after they are due. Each state’s professional tax regulations determine the actual fine. Businesses that fail to register professional tax, pay taxes late, or file returns on time may face fines, late fees, or imprisonment.

Failure to make a payment by the due date and failure to file a return by the due date carries additional penalties. For example, the following information outlines the penalty amount imposed by the Maharashtra Government for late filing or failure to pay Professional Tax in Maharashtra.

For example, professional tax of Rs.1 Lakh is delayed by 12 months, then the simple interest payable is Rs.1,250/- and a Penalty of Rs.10,000. Total= Rs.11,250

Maximum Penalty for delay in payment of Rs.1 Lakh for a year and return filing also delayed = 12250

Seamless Professional Tax Registration Services with LegallensIndia

LegallensIndia can assist you in simplifying the process of obtaining a Professional Tax Registration Certificate in India. Here's how our services can benefit you:

By choosing LegallensIndia to meet your Professional Tax obligations, you can confidently simplify the process and navigate the complexities of tax regulations.

File Your Professional Taxes Efficiently with LegallensIndia!