Professional Tax (P. Tax) is a state-level tax that the state governments of various Indian states collect from an employee, professional, and businessman. This is a duty collected in Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, Jharkhand, Sikkim, Mizoram, etc. All people falling within the income group, who incidentally earn through employment, a business, or any form of profession, are liable to be taxed. Employers collect professional tax from their employees; a self-employed person has to register and pay the amount personally.
Early registration of professional tax helps avoid innumerable penalties and legal issues. Professional tax compliance is good practice to establish credibility, avoid fines, and plan finances more soundly by reducing tax liability.
The rules may vary from state to state, and each state government collects its professional tax. For instance, in Karnataka, the tax is governed under the Karnataka State Tax on Professions, Trades, Callings, and Employments Act, 1975, covering various categories which include corporations, firms, societies, and Hindu Undivided Families (HUFs).
Credible Corporate Service streamlines Professional Tax registration, which is easy and hassle-free. Our staff will ensure you understand the legal requirements and timelines, as well as the exemptions available that may help reduce liability. We help you focus on growing your business while allowing us to take care of your tax compliance.
Professional tax registration is the process of getting registered with the state authorities for professional tax purposes. Every income earner has to register themselves with the state authorities.
Professional tax registration has various benefits for an individual as well as an organization:
Professional tax registration ensures that businesses comply with state-specific tax laws, thus avoiding penalties and legal consequences. Online registration further makes it easy and less error-prone.
Failure to register and pay professional tax results in a heavy fine and penalty. Proactive registration prevents fiscal liabilities and legal issues.
Registered employers can recover professional tax from their salary account employees for time-to-time tax payments that save for both the employer as well as employee. They can make it easier time and trouble-free.
The proof of compliance is through this registration certificate, wherein evidence is produced before any govt authority, finance/banking institution, and the clients.
Professional tax registration can open many doors to various government schemes, benefits, and incentives like welfare programs, subsidies, and tender preferences.
Professional tax registration is a sign of commitment to legal and ethical business practices, which builds credibility with clients, partners, and stakeholders.
Professional Tax for Employees:
Professional tax deductions of employees are generally facilitated by their employer, who pays in advance to the state so that the employee does not bear the burden of heavy tax. This helps prevent non-compliance with tax and maintains the employee's right against tax.
Self-Employed Professional Tax:
Individuals who are self-employed or freelancers are considered professionals and are expected to file professional taxes every month directly to the state government.
Submission of Professional Tax:
Whether a person is in employment or self-employment one needs to submit his/her professional tax with all the appropriate documents and proof of the payment so that one would not face any penalties for maintaining compliance with the state law.
For Employees:
Employment pays professional tax for those employees.
For Self-Employed:
Self-employed individuals are supposed to register and make professional tax payments according to the rules of their respective states.
Some people or groups are exempted from paying professional tax. Such exemptions normally apply to:
People with permanent disabilities (physical or mental)
Armed forces personnel on active duty
Blind people
Senior citizens aged 65 years and above
Parents or guardians of mentally handicapped persons
An employer has some specific responsibilities regarding professional tax registration and compliance. These include:
The employer should ensure that he and his employees are registered with the respective state tax authorities for professional tax.
The employers are to collect professional tax from their employees according to the state law prevailing in that region.
They have to submit the professional tax deducted during the salary period to respective state tax authorities within a specific timeframe so that no penalty comes against them.
The employer has to ensure appropriate record-keeping of professionals including the deductions, payments as well as employee-related details.
The Employer has to monitor the new changes in professional tax legislation and adhere to specific rules and regulations.
The employer has to return the professional tax within the time that incorporated the details of the deductions and payments made during the reporting period.
There should be proper communication by the employers to the employees regarding the professional tax deduction and payment schedule.
For getting professional tax registration, there are lots of documents that companies or individuals have to submit are as follows:
Certificate of Incorporation
Address proof of the Business/establishment
PAN Card
Aadhaar Card
Identity proof
Salary statement for the employees
Bank details
Attendance and salary register
Registration Process of Professional Tax
Any business registration proof, as applicable
We check whether your business or profession is liable to registration for professional tax.
Get in touch with Credible Corporate Service through call, email, or our contact form to start your registration process.
We assist you in payment for professional tax registration.
We prepare all the paperwork and submit your application to the concerned authorities.
The authorities will issue your Professional Tax Enrollment Certificate (PTEC) after processing.
To start with the registration process, visit the respective local Professional Tax office.
Fill in the professional tax registration form completely.
For this purpose, attach the PAN proof, address proof along with proof of business incorporation.
Send these forms and documents to the tax authority.
The tax authorities after verifying every thing will provide you with the Professional Tax Registration Certificate.
The types of professional tax certificates are as follows: Professional Tax Enrollment Certificate is issued to business, sole proprietary interest, and professionals. But in the case of businesses, when income tax has to be collected from employees to whom it pays salary/bonus or commission, it is called a Professional Tax Registration certificate. Since every state in India has prescribed different rules for registration as well as collection of professional tax all across the respective states, business ventures need to:
Lodge the monthly or quarterly return
Make payment of professional tax on time
Maintain appropriate books and accounts for the deduction and collection
Lodge in time on or before due dates
Arrears or late payments could be levied with enormous penalties to the extent of:
Month-Wise Penalty
This comes with an amount of penalty which is 1% for every month involved with regard to the sum due.
Over and above Penalty
Over and above Penalty for delayed payment gathers a penalty, of 10%.
Harsh Penalties
Fine up to three times the amount due for wrong or faulty information.
With Credible Corporate Service, you are ensured that professional tax registration will not pose a problem.
We handle the registration process and guarantee state tax law compliance at each stage.
Our solutions are tailor-made for your business based on its specific needs.
We help in completing your Professional tax registration on time and without a penalty.
Our experts will cover every step, from professional tax registration to returns filing, ensuring hassle-free compliance for you.