The Professional Tax Registration regulation is to be followed from any tax professional who is having the right information. By applying with the right process tax registration could be done easily. Registering Professional Tax is much important for employers and salaried individuals to complete their tax obligations.
Professional Tax is a direct tax which is places on a person’s income. Its a tax levied by the government of a state. Whether its salaried/wage earner or a person practicing different kinds of professional as Chartered Accountant, Lawyer, Doctor. Such Professional require to pay Professional Tax . Also, Individuals or professionals require the necessary documents for this to calculate their taxable income.
How to Begin the Professional Tax registration process using legal251?
Following these few steps an individual can apply for Professional Tax registration. Firstly, the applicant needs to fill out an application form which includes the user’s basic details. Then the users need to submit the relevant documents. The submitted document is quite easy to submit with the Legal251 mobile app or web dashboard.
Upon successfully submitting the documents, the PT registration declaration with our declaration is filed to the tax authority to scrutinize it. Lastly after successful procedure, the authority will issue the registration certificate and our will contact and provide the relevant information.
Apart from this Legal 251 comes up with an in depth knowledge in professional tax regulations in different states and UTs, Our team has all the information on potential exemptions or deduction limits that are available under professional tax regulations.
Highlights of Professional Tax Registration
- Within 30 days of employing an employee the professional tax registration is necessary. But if the place of work expands from one state or place, the registration certification has to be done independently by the authority.
- The Commercial tax department of the concerned State is responsible for collecting the deducted professional tax. 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.
- Professional Tax payment for every employer having more than 20 employees, needs to make the payment within 15 days from the end of the month. The employer who has less than 20 employees is required to do this payment on a quarterly basis.
- Also, people having PT registration have to file the professional Tax returns. Meanwhile the tax returns are filed at particularly specified intervals that depend on the requirement of the states.
Important Documents for Registration
For a smooth and hassle free registration process there are these documents which are required for Professional tax registration:-
:- Limited Liability Partnership Agreement
:- Memorandum of Association
:- Article of Association
:- PAN card of Company/LLP/Proprietor/Owner/Director
:- NOC from the landlord
:- Passport size photo of Proprietor/Owner/Director
:- Address and Identity Proof of Proprietor/Owner/ Director
:- Details of employees and Salary paid
:- Additional Licenses and Registrations
Every business owner is responsible for deducting the professional tax from the given salaries of employees. While paying the deducted amount to the relevant state government authority. In addition, the employer has to provide a return to the tax department in a prescribed form within the specified time period. However, it should also include the proof of tax payment. Incase of not enclosing the proof of payment, the return registration is incomplete and invalid.
Key Benefits of Tax Registration
- Professional Tax registration comes up with multiple advantages for businesses and individuals. It also provides compliance to income tax laws and regulations which are set by the state or union government. Followed by the correct formalities it can fulfill the legal obligation.
- If there is a failure to register for Professional tax it can result in penalties and fines imposed by authorities. The individuals who register for PT are needed to ensure that the Taxes are paid in a timely manner.
- Proof of Compliance the professional tax registration certificate is essential while transacting with government authorities, Financial institutions, Potential clients may inquire for proof of tax compliance.
- It also provides individuals and businesses to have specific government benefits, schemes or incentives. It can include access to welfare programs, subsidies or preferential treatment in certain government contracts.
- The Professional Tax registration shows the adherence of individuals or businesses in following the legal framework and doing the business ethically. It boosts the reputation and credibility among the clients, Partners and stakeholders. Lastly for ensuring a smooth registration process individuals or businesses should have clarity and a proper framed approach for tax management.
Calculation of Professional Tax
As per 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 stated by the state government placing Professional Tax. The slab rates differ from state to state.
Types of Certificates
There are three types of certificates regarding the professional tax. These are:
- PT Registration Certificate: It could be acquired by individuals and businesses for registering themselves for Professional Tax. It establishes compliance with Professional tax regulations and also is essential for doing a business or practicing a profession.
- PT Enrolment Certificate: Its acquired by the employers when they require an additional enrolment certificate and registration certificate then this confirms the employer’s enrolment in professional tax purposes. Also, it is necessary to deduct professional tax from employee salaries.
- PT Exemption Certificate: It is done to organize the criteria for exempting and avoiding the obligation of paying the professional tax. Also, only certain individuals or categories of professionals may be eligible for exemptions from professional tax.
Privilege for Payment of Professional Tax
According to the professional tax rules, there are privileges for individuals to pay the Professional Tax. Such as the individuals acting as guardians of individuals, suffering from mental disability, the members of auxiliary forces, reservists, serving in the state, badlli workers in textile industry, women acting 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 professional tax.
Professional Tax Rate and Applicable States
The Professional Tax rates vary from state to state accordingly and this tax is imposed every month. The maximum amount which could be placed by the state governments is 2500Rs/annum. While for professions such as Doctors or Lawyers, the professional tax rate could be higher. But not all Indian states impose Professional Tax, only selected states impose it.
Here is a list of state 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
Whereas state such as 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 Professional Tax registration depends upon the nature of the default of the payment. It could be a delay in obtaining the professional tax registration certificate and could lead for upto penalty of Rs.5/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.
