What is Professional Tax Registration?
Professional Tax filing is a mandatory imposition by municipal corporations in various states of India. Those who are practicing professionals such as CAs (Chartered Accountants), lawyers and doctors must pay these taxes to the government. The business owner deducts the professional tax from the salary of its employees and pays this amount to the respective state government department.
In India, this kind of tax is levied at the state level. Different states have different rates and collection methods. Professional tax is not valid for all states. The states levying this tax are Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Meghalaya, Odisha, Sikkim, Tamil Nadu, Telangana, Tripura, and West Bengal.
The professional tax rate is based on the income slab determined by the respective state governments. The quantum of professional tax applicable during a financial year can be claimed as a deduction under the Income Tax Act.
Time Limit to File Professional Tax:
Professional Tax (P.T) registration applications must be submitted to the relevant State’s tax department within 30 days of employing staff. In cases where there is more than one place of work, there must be made a separate application for each of those premises according to their jurisdiction.
Penalty In Case Of Non-Compliance:
For each delayed day in obtaining a Professional Tax registration, there is a penalty levied of Rs. 5. The penalty is 10% of the amount of tax for cases involving non-payment or late payment of Professional Tax. Further, for late filing of the return, it may amount to a penalty of Rs. 300 per return.
Applicability
Exemptions from Profession Tax:
The following individuals are not required to pay Professional Tax:
● Parents of children with a permanent disability or mental disability.
● Members of the forces as defined in the Army Act, 1950, the Air Force Act, 1950 and the Navy Act, 1957 including members of auxiliary forces or reservists, serving in the state.
● Individuals over 65 years of age.
● Individuals suffering from a permanent physical disability (including blindness).
● Badli workers in the textile industry.
● Women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings Schemes.
● Parents or guardians of individuals suffering from a mental disability.
Documents Required for Professional Tax Registration:
● Address proof of establishment (Shop and establishment certificate etc.)
● PAN of business, proprietors or partners or directors, whatever applicable
● Photo ID with the address of partners or proprietors or directors
● Financial statements of the establishment along with the salary details of employees
● Certificate of incorporation and address proof in case of a company.
Process of Registration
Each state government of the states where Professional Tax is applicable requires eligible individuals to register online, on their state government website. There is no common portal for registration of Professional Tax for all states.
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