Professional Tax is the tax levied by the various State Governments of India on salaried individuals working in government or non-government entities, or in the practice of any profession, such as CAs, Lawyers, Doctors, etc. or carry out some form of business, are required to pay this professional tax.
Professional tax is imposed at the state level in India. Different states have different rates and methods of collection. It is not imposed in all states. The states which impose professional tax are Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Meghalaya, Odisha, Sikkim, Tamil Nadu, Telangana, Tripura, and West Bengal. Professional Tax is deducted from the salary of the salaried employees by the employers and the same is deposited with the State Government.
Professional Tax Registration is done through TaxOSmart.
Professional taxes must be paid and collected by whom?
Employers are responsible for collecting professional taxes from their employees. According to state legislation, the employer collects and pays the tax to the commercial tax department. Professional taxes must be paid by business owners who work for an employer, whether they are corporations, partnerships, or sole proprietorships. State governments may require them to pay professional taxes if they provide a monetary threshold.
It is the employer’s responsibility to register themselves and obtain a professional tax registration certificate. A professional tax enrolment certificate will allow them to deduct taxes from employees and pay them to the Commercial Tax Department. If the business is operating in several states, a separate registration is required for each state.
In addition to registering with the state, freelancers will need to pay income tax according to their income threshold. They will also be liable for professional taxes depending on state legislation in their respective states.
Is there a professional tax rate?
In different states, different levels of professional taxes are imposed by the state government. The professional tax of each state is governed by laws and regulations. There is a slab system where all states levy a professional tax based on income.
Additionally, Article 276 of the Constitution which grants states the power to levy professional tax also provides for a maximum cap of Rs 2,500 above which no professional tax can be charged.
Taxes on Professionals – Who Collects Them?
Professional taxes are collected by employers from employees’ salaries.
The employer pays professional tax to the government when it is collected. Otherwise, if the employer fails to collect or pay professional tax, they can be fined. You are responsible for paying professional tax if you are employed independently.
Individuals without an employer can register by completing an application form. When the form is received, the individual will receive a registration number. ing registration number. Moreover, certain states also provide tax rebates to professionals who pay their taxes in a lump sum for several years at a time; so, it is worth checking with your state about its professional tax laws.
Individuals without an employer can apply for registration by filling out a form. They will receive a registration number once the form is received.
Fill out an application form if you do not have an employer. Once you submit the form, you will receive a registration number.
- Those who operate educational institutions that educate students through the 12th grade.
- A member of the Central Para Military Force (CPMF).
- An individual who has undergone sterilization and has one child. All required documents must be presented.
- Schedule I (Instruction No.1) applies to an ex-serviceman
- An applicant must have at least a 40% disability, as documented by a certificate. An applicant must have at least a 40% disability, as documented by a certificate.
- A taxi or three-wheeler owner with a permit to carry goods.
- Deaf, dumb, and blind people who earn a living.
- Citizens who are members of the Armed Forces, both combatants, and non-combatants. However, the Army Act must also apply to the Armed Forces.
- Techs working for the state.
- A hospital that provides philanthropic and charitable care in areas under the taluk level.
Where and how is a professional tax collected and paid?
The department that collects taxes
The Commercial Tax Department of each state collects the professional tax, which then goes to the Municipality Corporation Fund.
Taxes owed by professionals
- Employers are required to deduct, submit, and pay professional taxes to the state government if the state’s laws provide any monetary threshold as a basis for such a deduction.
- People carrying on a trade or profession (a corporation, partnership firm, sole proprietorship, etc.) have to pay professional tax on that trade/profession if the state has a threshold monetary amount for that purpose.
- Those who wish to deduct and pay taxes on behalf of their employees must acquire a professional tax enrolment certificate and a professional tax registration certificate.
- An employer must obtain both a professional tax enrolment certificate and a professional tax registration certificate before deducting tax from his employees and paying the tax.
- Those who wish to deduct and pay taxes on behalf of their employees must acquire by the State. For instance, parents and guardians of people suffering from mental retardation and blindness, among others, are exempt from levying Karnataka professional tax.
those who wish to deduct and pay taxes on behalf of their employees must acquire
Yoon’s employer must obtain both a professional tax enrolment certificate and a professional tax registration certificate before deducting tax from his employees and paying the tax. o another).
those who wish to deduct and pay taxes on behalf of their employees must acquire over. According to the Income-Tax Act, only movers and packers, as well as train/air tickets for relocating family members and hotel accommodations for up to 15 days are exempt from income tax.
to those who wish to deduct and pay taxes on behalf of their employees must acquire related to claims and payments incurred during the transition, along with proof of payments made. Moreover, the employer must claim these expenses in its books under the heading of business expenses. The difference between the actual expenses incurred and the relocation allowance paid by the employer is taxable.
Professional tax: Regulation violation
A business must register according to professional tax regulations. In addition, it is a tax that is imposed according to a threshold of income. Penalties apply if you fail to register or pay this tax. One may also be penalized if they do not pay on time. Non-filing taxes can also result in penalties in some states. The amount of penalty is different in every state.
FAQS ON PROFESSIONAL TAX REGISTRATION
1. Who are the employers liable for paying Profession Tax?
The Profession Tax Act requires employers to deduct Profession Tax from the salary/wages they pay their employees, and then to pay the Profession Tax so deducted.
2. Who needs a Certificate of Registration (RC)?
The employer is required to obtain a Certificate of Registration if he is liable to pay Professional Tax on behalf of employees who he pays salary and wages within the taxable limit.
3. When does an employer become liable for tax?
Specifically, when the employer pays any of his employee’s salary/wages for the first time within the taxable limit, he becomes liable for tax.
4.What will be included under ‘salary’ and ‘wages’?
The term “salary” or “wage” includes pay, dearness allowance, and all other remunerations received by a person on a regular basis, whether in cash or in-kind; also included are perquisites and profits in lieu of salary, as described in section 17 of the Income Tax Act, 1961 (43 of 1961); an expression “on a regular basis” means more than 180 days in a year.
5. When should employers pay Profession Tax?
Profession Tax must be paid by the 21st day of the month after a salary or wages are disbursed (except in the return month, where tax is to be paid before the return is filed). Late payment of tax attracts interest @ 1 % per month or part thereof.
6. What are my payment options for professional tax?
Profession tax can be paid through the GRIPS portal. F you can pay the professional tax online by going to www.wbcomtax.nic.in > e-services > e-payments > GRIPS as of 1-10-2014. Upon obtaining the Certificate of Enrolment, the employer is required to pay the tax against the registration number [except in the ‘Amnesty Scheme’ where tax as outlined in section 5(C) for past liabilities must be paid before/while applying for registration].
7. Upon obtaining a Certificate of Registration, am I required to file a return & if so, how?
Ans: You must file a return if you are registered. From the financial year 2014-15 onwards, returns must be filed annually (in April of the preceding year or part thereof). It is necessary to file a professional tax return in two steps. (a) Electronically: the procedure is described on www.wbcomtax.nic.in > Profession Tax > User Manual for e-return. (b) Submission of signed hard copy (and acknowledgment slip) to the concerned Profession Tax authority, within the stipulated time. Late submission of return attracts late fees @ Rs 200/- for the first month of default and @ Rs 100/- for each subsequent month of default or part there-of.