The Professional Tax (PT) Registration Regulation needs to be followed by any tax professionals with the right information. By following the correct process, hassle-free tax registration can be easily done. Professional Tax registration is also important for individuals and employers to fulfill their tax obligations. With Legal 251, we are working to simplify the PT registration process, ensuring compliance and ease of taxation.
Professional Tax is a direct tax that is levied on a person’s earned income. It is a tax levied by the government of a state or union territory in India. Whether it is from salaried and wage-earners or a person practicing different kinds of professions such as Chartered Accountant, Lawyer, Doctor. Such professionals are required to pay the Profession Tax. Moreover, individuals or professionals require the necessary documents for PT registration.
How to Follow the Professional Tax Registration Process Using Legal 251?
By following a few steps, one can easily apply for the Professional Tax registration process. At first, the user needs to fill out the application form that includes the basic details of the user. Then, users have to submit the necessary documents. The document submission process is quite easy with our Legal 251 mobile app or web dashboard. After the successful submission of the documents, the PT registration application with other declarations is filed to the Tax authorities for scrutiny. Lastly, after the successful operational procedure, the respective authority will issue the registration certificate and our team will inform you regarding the same.
Not only this, Legal 251 always comes first with in-depth knowledge of professional tax regulations in different states and union territories. Our team also has accurate information on potential exemptions or deduction limits that are available under professional tax regulations. We also offer a nominal registration fee while you pick our PT registration service. Besides this service, we have a wide range of services that include GST Filing, GST return filing, online accounting, trademark registration, and many more.
Highlights of Professional Tax Registration
- The Professional Tax Registration is compulsory within 30 days of employing the staff and also the same for self-employed persons from the start of their practice. However, if the place of work spans more than one state or place, the Registration Certification has to be done independently by the authority. It is followed concerning the place of work that comes under the jurisdiction of that authority.
- The deducted amount from the PT is collected by the Commercial Tax Department of the concerned state government. That at last reached the fund of the municipal corporation. The employers covered under the jurisdiction of “State Government” as Designated authority shall pay in the treasury by Challan through the bank. While other employers shall pay at the place of payment declared by the Designated Authorities concerned.
- Due dates for PT payment for every employer who has more than 20 employees, need to make the payment within 15 days from the end of the month. Whereas for the employer who has less than 20 employees he is required to make the payment on a quarterly basis.
- Moreover, all those who have PT Registration have to file the PT Return filing. Meanwhile, the tax Returns are also filed at particular intervals that further depend on the requirements of the states.
Important Documents for Professional Tax Registration
Some mandatory documents are required for the tax registration. Thus for a smooth and hassle-free registration process, one should keep the following documents ready. Such as Certificate of Incorporation / Limited Liability Partnership (LLP) Agreement, Memorandum of Association (MOA) and Articles of Association (AOA), PAN Card of Company/LLP/Proprietor/Owner/Director, NOC from the landlord, where the business is situated, Passport size photos of Proprietor/Owner/Director, Address and identity proof of Proprietor/Owner/Director, Details of employees and salaries paid, and Additional registrations and licenses.
Any business owner is responsible for deducting the professional tax from the given salaries of his/her employees. While paying the deducted amount that was collected to the relevant government department. In addition, he/she has to provide a return to the tax department in the prescribed form within the specified time. However, the return must include proof of tax payment. Whereas in case of not enclosing the payment proof, the return registration will be considered incomplete and invalid.
Key Benefits of Professional Tax Registration
- The PT registration has various advantages for individuals and businesses. It ensures compliance with the tax laws and regulations set by the state government or union territory. Following the correct registration formalities, one can fulfill the legal obligation.
- In case of failure to register for PT, can result in penalties while fines are imposed by the authorities. The employers who register for PT need to ensure that the tax is paid in a timely manner. As proof of compliance, the PT registration certificate can be essential while dealing with government authorities, financial institutions, or potential clients who may require proof of tax compliance.
- PT registration may allow individuals or businesses to grab specific government benefits, schemes, or incentives. Such benefits can include access to social welfare programs, subsidies, or preferential treatment in certain government contracts or tenders.
- The PT registration further showcases the commitment of individuals or businesses to following the legal framework and conducting business ethically. It can also boost the reputation and credibility among clients, partners, and stakeholders. Last but not least, with a smooth registration process, individuals or businesses gain clarity and a well-framed approach to tax management.
Calculation of Professional Tax
According to a recent update in the tax slab FY 23-24, individuals can calculate their professional tax liability based on the gross salary and tax slab as stated by the state government levying PT. However, the slab rates differ from state to state.
Three Types of Professional Tax Certificates
There are three types of certificates regarding the professional tax. These are:
- PT Registration Certificate: It can be obtained by individuals and businesses to register themselves for PT. It proves compliance with PT regulations and also is essential for conducting business or practicing a profession.
- PT Enrolment Certificate: It is obtained by employers when the employers require an additional enrolment certificate and registration certificate then this certificate confirms the employer’s enrollment for professional tax purposes. Also, it is necessary to deduct professional tax from employee salaries.
- PT Exemption Certificate: It is obtained to establish the eligibility for exemption and avoid the obligation of paying the PT. Notably, only certain individuals or categories of professionals may be eligible for exemptions from professional tax.
Privilege for Payment of Professional Tax
As per the Professional Tax rules, there are privileges for individuals to pay the Professional Tax. Such as the guardians of individuals suffering from mental disability, the members of the forces as defined in the Army Act, of 1950, the Air Force Act, of 1950, and the Navy Act, of 1957 including members of auxiliary forces or reservists, serving in the State, badli workers in the textile industry, individual suffering from a permanent disability, physical disability (including blindness), women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings and individuals, above 65 years of age are free from paying the PT.
Professional Tax Rate and Applicable States
The Professional Tax rates and methods vary according to different states and are imposed every month. The maximum amount levied as professional tax is Rs. 2500/- per annum. While for certain professions, such as Doctors and lawyers, the PT rate may be higher. Although, not all Indian states impose PT, only selected states impose it. Here is the list of selected states where PT is applicable:
- Andhra Pradesh
- Assam
- Bihar
- Gujarat
- Jharkhand
- Karnataka
- Kerala
- Madhya Pradesh
- Maharashtra
- Manipur
- Meghalaya
- Mizoram
- Nagaland
- Odisha
- Pondicherry
- Punjab
- Sikkim,
- Tamil Nadu,
- Telangana,
- Tripura,
- West Bengal
On the other hand, Andaman and Nicobar Islands, Arunachal Pradesh, Chandigarh, Chhattisgarh, Dadra and Nagar Haveli, Daman and Diu, Delhi, Goa, Haryana, Himachal Pradesh, Jammu and Kashmir, Ladakh, Lakshadweep, Rajasthan, Uttar Pradesh, and Uttarakhand are the states where the PT is not applicable.
The penalties related to PT registration can be dependent on the nature of the default. Such as delay in obtaining the PT registration certification can cause a penalty of Rs.5/- per day. In case of non/late payment of professional tax, the penalty will be 10% of the amount of tax. Additionally, the late filing of returns can cause a penalty of Rs. 1000/- per return if filed after the due date in one month. After one month, a penalty of Rs. 2000/- will be imposed.
FAQs
Q: How would I know that I have to pay professional tax?
A: If an individual is earning more than Rs. 15000/-, then he/she needs to pay the PT according to the tax slab of the relevant state. Meanwhile, the employer will pay the tax accordingly.
Q: Is it necessary to pay PT?
A: Yes, it is necessary to pay the PT by every tax professional while if anyone misses the chance then there are penalties for non-compliance. However, timely payment of PT can help to avoid the additional penalty for failure.
Q: What is the maximum amount of PT levied by any state?
A: The maximum amount of PT levied by any state is Rs. 2500/-.
Q: What is the due date for the payment of PT?
A: The due date of the payment of PT depends on the enrollment date of the entity, if it is enrolled before 31st May then the due date falls before 30th June. While after 31st May, the due date falls 30 days before the enrollment date.
