Registration for Professional Taxes: An Introduction:
Despite the name “Professional”, this tax is levied by each state government in India; it applies to every employee, businessman, and freelancer.
There is a threshold limit for this tax, and it is an add-on to income tax. As provided in the Indian Constitution, each State Government may make/ amend laws relevant to professional tax levying on businesses, trades, etc. The maximum tax rate is 2500 INR per person/business entity/per annum.
Based on the norms set forth by the State Government, the following entities must pay the Professional Tax:
- Societies, associations, and various clubs, which could be firms or LLCs (limited liability companies)
- Lawyers and law firms
- Diverse lines of business contractors
- Certified Public Accountants
- Doctors and engineers
There are a number of states that impose professional taxes:
- West Bengal,
- Andhra Pradesh,
- Tamil Nadu,
- Madhya Pradesh, and
Self-employed individuals who earn income through their profession, trade, or calls are subject to this state-level tax based on income slabs. The maximum tax amount is currently Rs. 2,500.
How does the required work?
Almost all of the processes have become easier due to the internet world; such as registering for Professional Tax online. Although the requirements for Professional Tax online registration vary from state to state, there may be some similarities. If the application is for a company, a copy of the PAN and proof of residence of all directors/partners would need to be attached to the form. In addition, the current bank account details and the Memorandum of Association must be provided.
Business entities spread across states must obtain professional tax registrations in each state they operate in.
Tax payments that are delayed will incur penalties in accordance with state government regulations.
A Professional Tax Certificate can be either a PTEC or a PTRC.
Business entities, owners, freelancers, consultants, and professionals are all required to pay the Professional Tax Enrolment Certificate.
The PTRC stands for Professional tax registration certificate, which is given to employees by their employers (private or public). The employers deduct the applicable taxes from their salaries and deposit them with the state government.
How does professional tax online registration work?
- A professional tax registration application must be submitted online.
- When an individual registers, he or she must provide details such as mobile number, email address, etc., and a unique username and password will be sent via email and mobile.
- Self-assessment applications must be submitted by the individual for professional tax.
- Documents that must be uploaded are as follows:
- Company Registrar’s certificate received
- Incorporation Memorandum
- The proof of the office
- You receive a certificate from the commercial tax department
- Details of Pan Card and Bank Account
- Specializations of employers and employees
- When the application is submitted, there will be no fee to pay
- In addition to a professional tax number, an acknowledgment slip will be generated after the application has been submitted.
- Assessees can now pay their taxes online.
Is there a certificate of professional tax registration?
In certain states, employers must deduct taxes from salaries when paid to one or more employees, for example, when the payment exceeds Rs. 5000, and a registration certificate must be obtained.
A person who two or more employers employ – whose salary exceeds Rs. 5000 (in Maharashtra, check the limit for your state) – but the employer is not deducting professional tax needs an enrolment certificate.
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