Filing of Professional Tax Returns is one of the essential requirements for the business entities liable to pay professional tax. This tax is levied by the state government on professionals, salaried persons, and others who are employed in any trade, or employment. Professional Tax Return is a document submitted to the state government showing the amount of tax paid by an individual or business entity. It then becomes part of the proof that you follow the norms of the state. Professional tax filing is such a hassle and time-consuming affair, but Credible Corporate Services makes the whole process smooth and on time - from the collection of documents to the submission of returns and making a payment for taxes.
We help you meet your tax obligations pretty fast and quite efficiently, of course in accordance with the rules and regulations of the state government.
Professional tax is a direct tax collected from individuals who earn their income by some employment, profession, trade, or calling. However, unlike income tax that is collected by the central government, professional tax is collected from the state or union territory in which such an individual or business lies. Interestingly though, the income tax is being collected from the central government, a state has its different set of rules for collecting professional taxes. Professional tax is collected by the employers from the wages paid to the employee and is remitted to the state government of salaried and wage earners. Self-employed persons would be responsible to pay the professional tax and file the return themselves. While the quantum of professional tax and the way of collection differ from state to state, it normally reaches Rs. 2,500 per annum.
A Professional Tax Return is a document that is submitted by individuals or entities liable to pay professional tax. The return consists of the details of income earned by the taxpayer or business and the tax paid in the course of the financial year. The return is submitted to the appropriate state government department, and it must be filed annually for compliance with tax regulations.A professional tax return is essentially a duty of salaried taxpayers as well as business owners since it maintains transparency and legality according to State Tax Laws.
It strictly depends on the type of taxpayer:
For Salaried Employees:
The employer would need to deduct professional tax from the salary of the employee and then remit it to the state government. However, the same would be filed on behalf of employees by the employer as a Professional Tax Return.
For Self-employed Individuals or Business Entities:
Self-employed professionals or business owners must pay professional tax themselves and file the return to comply with state regulations.
Even in many states, employers are compulsorily requested to file their returns for their self-employed staff if they are working under the contract or structure of the employer.
Professional Tax is a state-level tax, and its applicability varies with region. Here is a list of states where Professional Tax is applicable:
- Andhra Pradesh
- Assam
- Bihar
- Chhattisgarh
- Gujarat
- Karnataka
- Kerala
- Madhya Pradesh
- Maharashtra
- Manipur
- Meghalaya
- Mizoram
- Nagaland
- Odisha
- Punjab
- Rajasthan
- Tamil Nadu
- Telangana
- Tripura
- Uttar Pradesh
- West Bengal
Every state has its rules and regulations regarding professional tax, and the return is to be filed in the prescribed manner by the concerned state government.
Indian state governments have different professional tax rates. In most cases, tax calculation is done based on the monthly income of a tax-paying individual. The broad general slabs of professional tax are given as follows:
Individuals in this group generally pay the minimum amount of professional tax, which is approximately Rs. 150 a month or less, as a state may vary in rates.
Professional tax is raised with greater income brackets. These persons have to pay a professional tax between the range of Rs. 300 a month.
The people who have a higher amount of income are liable for the highest tax slab or slab according to the state, for which the amount can differ between Rs. 500 to Rs. 2,500 every year.
These rates vary by state and the taxpayer should refer to his or her state regulations for the proper professional tax amount.
The filing responsibility of professional tax returns depends on whether the taxpayer is an employer or an employee.
For Employers: The employer is liable to file professional tax returns for his salaried employees.
The employer is also liable to deduct the amount of professional tax from the wages of the employee and remit it to the state government and, on its behalf, file the return.
For those with a self-employment nature- Professionals and business persons; such persons file the professional tax themselves and send it to the state authority.
Among the persons who are exempted from filing professional tax returns, some of the classes are included as follows:Those professional taxpayers whose tax liability falls within the exemption threshold
Parents or guardians of children afflicted with mental or any other disability.
Persons with permanent physical disability, including blindness.
Armed Forces personnel, including but not limited to those defined under the Army Act, Air Force Act, and Navy Act.
Badli workers in the textile industry.
Women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana.
Seniors aged 65 years and above.
Still, these exemptions vary depending on the state. It is therefore important to check state-specific rules where the taxpayer resides.
PT Return Due Dates
State deadlines for filing professional tax returns vary. Most states require the annual filing of professional tax returns for businesses and individuals, but the deadlines for filing and paying professional tax might vary. Thus, it is essential to know the deadlines set in the state to avoid late fees and penalties.
Timely Filing of Professional Tax Returns by individuals and businesses has a lot of benefits:
Filing returns on time will avoid penalties, interest, and legal consequences. It ensures compliance with state tax laws to avoid potential legal actions.
A clear record of tax payments and filing will enhance your creditworthiness. Banks and other financial institutions will be lenient with loan facilities, among other credit facilities, to you.
The act of tax return filing avails social security benefits, which include, among others, medical insurance, pensions, and welfare schemes offered by the government.
Filing professional tax returns is an easy and user-friendly process. Online filing systems from many states make it easier, taking much less time compared to previously.
Filing in time helps the government trace tax liabilities correctly, ensuring that the right amount of tax is collected from individuals and businesses. This adds to the revenue of the state and, in turn, to the overall economic development.
These may vary from one state to another, though the following are some of the basic documents that are to be provided in general, and that are commonly accepted in all the states.
These documents include:
PAN Card
Aadhaar Card
Voter ID or Passport
Bank Account Details
Salary Slips or Income Proof
Registration Certificate for business
Challans or Payment Receipts for Professional Tax paid TDS Details-If Applicable
Late submission of professional tax returns brings several penal amounts against them; it differs from state to state. The common penalties imposed due to late submission are as follows:
Late Charges
Most states have a late charge per day the return is overdue. For example, Maharashtra charges Rs. 5 per day for non-registration and Rs. 1,000 for late filing of returns.
Interest Accrual
States also impose interest on delayed payments at an average rate of 1.25% per month.
Further Penalty
If it is not remitted by the due date of the order, another additional penalty is also to the tune of 10% of the tax amount.
For example, failure to file the return against his professional tax of Rs. 1 lakh within a period of 12 months would amount to a sum of Rs. 1,250 in interest with Rs. 10,000 in penalties. In other words, the total of the penalty stands at Rs. 11,250.
Professional tax return filing is done on time within the policies of the state government's regulation by Credible Corporate Services. All the procedures to file a professional tax return are carried out on your behalf so that you don't have to undergo all the hassle and complications of it. Through affordable, reliable, and efficient services, the focus of Credible Corporate Services shifts back to core business operations and other work.
Work with us and we will guarantee your professional tax return is filed to prevent getting some sort of penalty or legal issues. Therefore, take that burden off your shoulders, letting you focus on growing the business or career.
Filing professional tax returns appears to be such a complicated matter, but with the right support, it becomes much easier. Credible Corporate Services is there for you and ensures that all obligations are met without a great deal of hassle.
Let deadlines and paperwork burden you no more; just call us for a smooth experience with professional tax filing.