MEANING – PROFESSIONAL TAX

Unlike the name, Professional Tax is not a tax which is applicable on professionals only, it is tax which is applicable on all kinds of professions, trades, and employment and based on the income.

Applicability:

It is applicable on:

1. Business including freelancers

2. Professionals including CA, CS, Doctors

3. Employees

Professional tax is applicable once the person begins his profession or business within 30 days of starting the profession. In case the company has its presence in different places, then it is required to take registration for each such place.

Exemptions to Certain Persons?

  • Foreign employees are exempt from paying profession tax.
  • Individuals who run educational institutions that teach classes up to twelfth standard.
  • Individuals in the Central Para Military Force (CPMF).
  • An individual who has one child and has undergone a sterilization operation. However, the relevant documents must be submitted.
  • Any ex-serviceman who comes under SI. No.1 (Schedule)
  • Any handicapped individual who has at least a 40% disability. However, the relevant certificate must be submitted.
  • Individuals who have a permit for a single three-wheeler or a single taxi to carry goods.
  • Deaf, dumb, and blind individuals who are earning a salary.
  • Civilian non-combatant and combatant members who are part of the Armed Forces. However, the Army Act must govern the Armed Forces.
  • Foreign technicians who have been employed by the state.
  • All philanthropic and charitable hospitals that are present in places that come below taluk level.

COMPLIANCE

All person subject to professional tax are subject to following compliances

1. Registration

2. Payment of tax

3. Return filing

a) Monthly

b) Annually

The above mentioned are discussed hereunder:

PROFESSIONAL TAX REGISTRATION

There are two kinds of Professional Tax Registrations:

1. Professional Tax Employer Registration

All business and organisation are required to obtain employer registration regardless of the number of employees working in the organisation. The procedure of registration is based online, after submission of application Professional Tax Enrolment Certificate i.e. PTEC (registration certificate), is issued by the Commercial Tax Department.

2. Professional Tax Employee Registration

Every employer is required to obtain professional tax employee registration on behalf of the employees. Professional tax for the employee is deducted by the employer. The certificate obtained is known as Professional Tax Registration Certificate known as PTRC.

PAYMENT

An employer is required to pay two types of professional tax, one is professional tax for his/her/its business known as PTEC and another is professional tax deducted form the salaries of employees known as PTRC.

These taxes are payable monthly, annually, semi-annually based on the law of the state.

RETURNS

Similar to the payment of tax, an employer is required to file two types of professional tax Return, one is professional tax Return for his/her/its business (PTEC) and another is professional tax Return for employees (PTRC).

These returns are filed monthly, annually, semi-annually based on the law of the state.

PROFESSIONAL TAX SLAB RATES IN DIFFERENT STATES

PROFESSIONAL TAX RATE SLAB IN MAHARASHTRA

Monthly salary (in Rs.) Profession Tax (in Rs. Per month)
Up to Rs.7,500 for Male Employees Nil
Up to Rs.10,000 for Female Employees Nil
Rs.7,501 to Rs.10,000 Rs. 175
Rs.10,000 and above Rs. 200 for 11 months and Rs. 300 for the month of February

PROFESSIONAL TAX RATE SLAB IN KARNATAKA

Monthly salary (in Rs.) Profession Tax (in Rs. Per month)
Up to Rs.14,999 Nil
More than 15,000 Rs.200

PROFESSIONAL TAX RATE SLAB IN WEST BENGAL

Monthly salary (in Rs.) Profession Tax (in Rs. Per month)
Up to Rs.10,000 Nil
Rs.10,001 to Rs. 15,000 Rs.110
Rs. 15,001 to Rs. 25,000 Rs.130
Rs.25,001 to Rs.40,000 Rs.150
More than Rs.40,000 Rs.200

PROFESSIONAL TAX RATE SLAB IN MADHYA PRADESH

Monthly salary (in Rs.) Profession Tax (in Rs. Per month)
Up to Rs.18,750 Nil
Rs.18,751 to Rs.25,000 Rs.125
Rs.25,001 to Rs.33,333 Rs. 167
Rs. 33,334 and above Rs.208 for 11 months and Rs. 212 for the last month

PROFESSIONAL TAX RATE SLAB IN TAMIL NADU

Monthly salary (in Rs.) Profession Tax (in Rs. Per month)
Up to Rs.3,500 Nil
Rs.3,5001 to Rs.5,000 Rs.22.5
Rs.5,001 to Rs.7,500 Rs.52.5
Rs.7,501 to Rs.10,000 Rs.115
Rs.10,001 to Rs.12,500 Rs.171
Above Rs.12,500 Rs.208

PROFESSIONAL TAX RATE SLAB IN ANDHRA PRADESH

Monthly salary (in Rs.) Profession Tax (in Rs. Per month)
Up to Rs.15,000 Nil
Rs.15,001 to Rs.20,000 Rs.150
Above Rs.20,000 Rs.200

PROFESSIONAL TAX RATE SLAB IN GUJARAT

Monthly salary (in Rs.) Profession Tax (in Rs. Per month)
Up to Rs.5,999 Nil
Rs.6,000 to Rs.8,999 Rs.80
Rs.9,000 to Rs.11,999 Rs.150
Rs.12,000 and above Rs. 200

PROFESSIONAL TAX RATE SLAB IN ODISHA

Monthly salary (in Rs.) Profession Tax (in Rs. Per month)
Up to Rs.13,304 Nil
Rs.13,305 to Rs.25,000 Rs.125
Rs.25,001 and above Rs.200 for 12 months and Rs.300 for the last month

DOCUMENTS REQUIRED FOR PROFESSIONAL TAX REGISTRATION

  • Incorporation Registration / Certificate
  • Business PAN Card
  • MOA & AOA of Company or LLP Agreement or Partnership Agreement etc.
  • PAN of Directors/Proprietor/Partners
  • Address Proof of Directors/Proprietor/Partners
  • List of Directors/Proprietor/Partners
  • Authorisation Letter
  • Cancelled Cheque

All these documents are required to be self-attested.

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