Salaried individuals who work for the government or non-government entities or practice any profession, such as Chartered Accountants, Doctors, and Lawyers, are taxed on the profession tax. Under Clause (2) of Article 276, states have been granted the power to level the tax on engineers, consultants, artists, and other individuals or persons carrying on some form of business. This form of tax has been in practice for a long time. Based on the Income Slabs set by the respective State Governments, the Profession Tax rates are calculated. However, no state has been allowed to levy more than Rs 2500/- in terms of Profession Tax. According to the Income Tax Act, the amount of professional tax paid during the year can be deducted.
Salaried employees are required to pay professional tax, which is deducted by the employers from their salaries.
The tax must be collected and deposited by the State Government within the deadlines provided by the respective State Governments, or it must be paid directly by them or by their respective Local Bodies. Tax is payable to the government on a semi-annually basis. Penalties and late fees will apply if one fails to do so.
Documents Required For Professional Tax Registration
- The incorporation certificate.
- Association Memorandum, Articles of Association, Partnership Deed, and Limited Liability Partnership Agreement.
- Whether it’s a company or a sole proprietor, the PAN card should be displayed.
- Photocopies of passport-sized photographs, identity proof, and address proof of directors and other partners.
- A statement of consent or a resolution by the Partners.
- Proof of the address of the office, including the owner’s NOC.
Professional tax is collected by who?
It is the employers’ responsibility to collect professional tax from the monthly salaries of their employees. Those who do not collect or fail to pay this tax can have penalties imposed on them. If you do not work for anyone, you are responsible for paying your own professional tax.
Professionals who are not employed by an employer can register by filling out a form. The individual will receive a pt registration online number once the form has been received, and the professional tax can be paid at any bank by using this number. Moreover, some states also offer rebates on professional taxes if paid in a lump sum for several years together, so it is a good idea to inquire about your state’s professional tax rules.
Professional Tax Applicability
Individuals and entities listed below are subject to professional tax:
- The companies
- Limited liability companies
- An organization
- The social sector
- Groups of people
- Organizing clubs
- Solicitors and other legal professionals
- Roofing contractors
Frequently Asked Questions about Professional Taxes
- Would you please tell me what to do about my professional tax queries?
The control room operates 24×7 and you can reach it by calling on any one of the numbers 080-22208401/080-22342689/080-22252258. A representative from the office will assist you in answering your questions.
- What are the differences between professional tax rates between states and union territories in India?Consequently, the professional tax differs between states because each state has its own slabs that it declares. Taxes on professionals are levied by the state government.
3. Why are Union Territories not subject to professional tax?
As Union Territories are small regions under the control of the central government, they do not pay professional taxes since they tend to generate lower revenues.
4. In the event that incorrect information is provided, what is the penalty?
Applicants for Registration Certificates or Enrolment Certificates who provide false information will be penalized three times the amount of tax payable under the Profession Tax Act under section 5(6).