PROFESSIONAL TAX REGISTRATION Tutorials Background and Knowledge
Profession Tax is the tax levied and collected by the state governments in India and is a type of indirect tax. A person earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this Professional Tax. Different states have different rates and methods of collection. In India, profession tax is imposed every month. However, not all states impose this tax. The states which impose professional tax are Punjab, Uttar Pradesh, Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, Jharkhand and Sikkim . Business owners, working individuals, merchants and people carrying out various occupations come under the purview of this tax.
Profession Tax is levied and collected by the Commercial Taxes Department of State Governments, in some states by particular Municipal Corporations and majority of the Indian states are collecting this tax. It is a source of revenue for the government. The maximum amount payable per year is INR 2,500 and in line with tax payer's salary, there are predetermined slabs. It is also payable by members of staff employed in private companies. It is deducted by the employer from their employee every month and remitted to state exchequer and in some states sent to the Municipal Corporation. It is mandatory to pay professional tax. The taxpayer is eligible for income tax deduction for this payment. Tutorials Registration and Compliances
Registration
Employers have to apply for the Registration Certificate of their respective State Tax Department within 30 days of employing the staff. In case the place of work spans multiple states or place, application for the Registration Certificate has to be done separately to each authority with respect to the place of work coming under the jurisdiction of that authority.
Contravention
Delays in obtaining Registration Certificate, a penalty of Rs. 5/- per day. In case of non/late payment of profession tax, penalty will be 10% of the amount of tax. In case of late filing of returns, a penalty of Rs. 1000 per return will be imposed if you filed after due date in 1 month. After 1 month, a penalty of Rs. 2000 will be imposed. Professional Tax Registration Process
Application to be made to the Professional Tax Registration Department 1 of the State Government along with all documents.
Review of the application by the Department and on approval of 2 the same, Professional Tax registration is provided.
Note: The documents required to be submitted along with the application are ID Proof (Pan card, Passport , Driving License, Voter Card, Aadhar card), and, Utility Bills (Electricity bills, Telephone bills). Tutorials FAQs
Certificate of Enrolment (EC) : Any person liable to pay Profession Tax is required to obtain a Certificate of Enrolment (EC).
Time limit to apply for Enrollment / Registration : A person / employer shall apply within 30 days of becoming liable to pay tax.
Demat Certificate of Enrolment: If the applicant has paid tax through GRIPS (online tax payment portal of the Government of West Bengal) and possesses a valid PAN (under the Income Tax Act, 1961), he is eligible to obtain Demat Certificate of Enrolment.
Why does Professional Tax differ from state to state: The Professional tax varies greatly from state to state since professional tax is levied by States, who have the power to limit it as they think fit. The only thing which stays common is the Professional tax amount cannot exceed Rs.2500.
Is Professional tax applicable to Union Territories: Currently Professional tax is levied by 20 states and Union Territories taken together.
Refund of Professional tax : Professional tax is paid at the end of month presuming that you have carried out the profession in that month. Therefore once professional tax is paid, there can be no refund. But deduction for profession tax can be claimed while filing your salary returns.
Can the professional tax liability amount be paid in lump sum: In certain states there is concept of composition scheme. For e.g. in case of Maharashtra, the government announced composition scheme under which any person liable to make payment to government at rate of Rs. 2500 may make a lump sum payment in advance of Rs. 10,000 and his liability to pay for 5 years will be discharged.
Cancellation of Professional Tax Registration :The user can apply online for cancellation through the Professional Tax Portal under Registration> Cancellations. Why SeedUp? Let’s ● Completely online ● Time bound closure ● Round the clock customer Start a support ● Complete confidentiality Project ● Cost effective ● Customised packages Together!