+91 - 8376000125
USA - +1 213 579 5514

Unit No.206, SS Plaza Sector-47, Gurgaon, Haryana-122018
 
     
   
 
 
     
   
 

Professional Tax Registration

About Professional Tax Registration

Professional Tax Registration

Professional Tax is a tax imposed by some of the state governments in India on persons earning income from salary or practising professionals such as Chartered Accountant, Company Secretary, Lawyer, Doctor etc. and from the company, LLP, Directors and Designated Partners.

For Whom

Applicability of Professional Tax Registration

Company /LLP / Firm

The persons like HUF, firm, Limited Liability Partnership (LLP), Company, Corporations, other Corporate bodies, any societies, Club or Association is considered as a taxable person under Professional Tax. Or every branch of the above said persons are treated as the separate person for the purpose of registration with the Professional Tax Department and Tax payments.

Individual Professionals

Legal Practitioners including Solicitors and Notaries, Medical Representatives including Medical Consultants and Dentists, Doctors, Chartered Accountant, Company Secretaries, Management Consultants, Architectures, Engineers, Tax Consultants, Insurance Agents, and Surveyors all kind of Contractors etc.

Directors & Partners

Persons acting as Directors of the Companies, the Partner of a firm or designated partner and Partners of LLP are also considered as Professionals. Hence, to comply with the provisions of Professional Tax law the Directors and Partners are required to obtain registration under PT Act, within 30 days of their appointment.

As an Employer

The professional tax on salaried individuals in applicable state is to be collected by the employer after making the appropriate deduction from the salary of the employees and to deposit with the professional tax department. The employer needs to obtain registration with professional tax department within 30 days of its applicability

Documents Required

Documents To Be Submitted

  • Address proof of establishment
  • Address proof of partners, proprietor or directors as applicable
  • PAN of partners, proprietors and directors as applicable
  • Photo of partners, proprietors and directors as applicable
  • Salary details of employees
  • Financial statements of the establishment
  • Certificate of incorporation and address proof in case of company
  • Board Resolution or consent statement of partners
  • Premises proof of Company and an NOC from the owner of such premises

Steps for Applying

Process for Applying Professional Tax Registration

  • Fill – Fill the online application form – form 49A
  • Pay – Make Payment online
  • Sign – Download the prefilled application and affix photos and signature.
  • Send – Send the signed application and supporting documents by post or courier to the address provided in the welcome mail

ALthough this is a State-specific, so every state could have different procedure, however following are the general steps involved here.

Business Registration / Incorporation

Register the Business as Proprietorship /Partnership / Limited Liability Partnership or Private Limited Company

Application to Professional Tax Department

Submit online application for Employer Registration (Enrolment Certificate) to Professional Tax Department with all supporting documents

Obtaining Certificate of Enrolment (EC)

After submission of application, submit the supporting of documents to Depart and obtain the Certificate of Enrolment (EC)

Exemption

Exemption from professional tax payment

The following individuals are exempted from professional tax:

  • Parents of children with a permanent disability or mental disability.

    Members of the armed forces, including members of auxiliary forces or reservists, serving in the state.

  • Individuals, over 65 years of age.
  • An individual who is physically challenged (also visually challenged).

    Women exclusively engaged as agent under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings.

  • Parents or guardians of individuals who are mentally challenged

    Badli workers in the textile industry.

Benefits

Why pay Professional Taxes?

Here are the reasons why one should never miss a professional tax payment

It Is A Judicial Requirements

As per the rules and regulations of India, every employee is bound to make the professional tax payment without fail. Employers in many states of India are strictly bound by the judiciary to obtain the registration of professional tax. After the registration, they have to make the deductions and pay the service taxes of all the employees who work under them.

To Avoid Paying Penalties

Failure to professional tax registration results in huge penalties that keep on increasing over time.

Easy To Comply

When something is easy to comply, it won’t be difficult to follow. The professional tax regulations are so easy to follow that and not difficult to comply with. The registration procedures can be done quickly and the further proceedings are also much easier.

Deductions

Deductions can be claimed in the salary on the basis of the professional tax paid. The deductions will be allowed in the year corresponding to which the taxpayer made the payments.

The State Government Tax

The local authorities and the state government have the right to collect all the professional taxes based on employment, profession trades and much more. The collected amount of professional tax per annum should not go beyond Rs. 2500 per an annum.

FAQs

1. What is professional tax and when is it levied?

Professional tax is a state level tax which is imposed on income earned by way of profession, trade, calling or employment. The tax is based on slabs depending upon income of individual who may be self employed or working as employee of an entity. At present the maximum tax that can be imposed is restricted to is Rs. 2500/-.

2. What is enrolment certificate and what is registration certificate?

Every employer in specific states is required to deduct taxes from salary when paid to one or more employees when payment made exceeds Rs 5000(this limit is for Maharashtra) and deposit with state government. That entity is required to obtain registration certificate. When person is employed in profession by two or more employers and is getting salary/wages exceeding Rs. 5000 but employer is not deducting professional tax then the individual needs to get enrolment certificate from authority.

3. Is Professional tax imposed in every state in India?

Professional tax is imposed only in following States: Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamilnadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, and Sikkim.

4. Who is responsible for deducting the tax and depositing the same with Government?

In Expert’se of individuals who are self employed the tax has to be paid by the individual himself In Expert’se of employed individuals, the liability is on the employer

5. Can the professional tax liability amount be paid in lump sum?

In certain states there is concept of composition scheme. For e.g. in Expert’se of Maharashtra, the government announced composition scheme under which any person liable to make payment to government at rate of Rs. 2500 may make a lump sum payment in advance of Rs. 10,000 and his liability to pay for 5 years will be discharged.

6. What will be the other costs in the registration process?

The plan price covers all professional fees and convenience charge. Since Professional tax is state level tax the applicable govt. charges vary from state to state. Government charges will be charged on actual basis.