Online Professional Tax Registration in India

Every person who receives a salary is subject to professional tax, which state governments levy.

All working professionals, including chartered accountants, attorneys, and physicians, are subject to professional tax. It is assessed by the person’s occupation, trade, or profession. All states have different tax rates, but the annual maximum sum assessed as professionals tax is ₹2,500.  

The professional tax is often calculated as a slab amount based on the professional’s gross income. Each month, it is subtracted from his paycheck. Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura, and Madhya Pradesh are the states that have enacted professional taxes. Employers are responsible for withholding professional tax from salaried and wage-earners’ salaries and wages and depositing it with the appropriate state government. For individuals in other categories, this tax must be paid by the individual. 

Did You Know?

When this tax was introduced in India, the highest amount that could be collected was  ₹250.

Importance of Online Professional Tax Registration in India 

• Self-employed individuals and employers also should pay their professional tax based on their rates or salaries supplied by their respective states within the prescribed time.

• Professional tax registration internet banking is a judicial requirement in India, and anyone failing to do so may be liable for the penalty or legal problems.

• Professional tax is straightforward to follow and understand.

• The laws and regulations regulating professional tax impose few limits, and registration is relatively simple with straightforward monthly or yearly compliances.

• You can seek a deduction for professional taxes you’ve already paid. The professional tax service, a state tax, must subtract the professional tax from a professional’s fees, business income, and compensation.

Online Professional Tax Registration: A Step-by-Step Guide

The process for registering as a professional taxpayer differs by state: If a business owner employs people in several states, the tax slab rates may fluctuate from one to the next, necessitating professional tax registration for each jurisdiction. 

Return filing frequency: The state in which a person resides will determine how frequently they must file returns. Understanding the state regulations is essential before filing a return. 

• Become registered as a professional tax payee with the state’s local professional tax office.
• It is essential for all people and companies who are responsible for paying taxes.
• Fill out the prescription form with the professional tax pay. The chartered accountant must audit the payment and computations made.
• When it comes to employees, the employer is required to withhold the professional tax from their salary.
• Once a person registers, he is then obligated to pay professional tax, with different professions having varying PT rates.

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Documents Needed to Register for Professional Taxation

For Individual/Proprietorship:

1. Electricity Bill/Rent Agreement
2. PAN Card of the Individual
3. Individual’s Aadhar Card
4. Two passport-size photographs of the individual
5. An individual’s signature on a blank piece of paper
6. Returned bank statement

Other Organisations:

1. Articles of Association (AOA) and Company Memorandum of Association (MOA) of the Company
2. DIR-12 (If any)
3. Electricity Bill/Rent Contract
4. Company or firm PAN
5. Director PAN
6. Director’s Aadhar Card
7. Individuals’ two passport-size photos
8. Signatories’ Letter of Authorisation
9. Board Resolution passed for this purpose
10. Signature on a blank piece of paper
11. Bank statements and cancelled checks

Please note that the electricity utility bill is only necessary if a business location is owned. Otherwise, the rental agreement contract is required.

Also Read: Challan 280 : How To Pay Your Income Tax Online With Challan 280

Why Register For A Professional Tax License Online?

• Businesses in certain states are obligated to register as professionals for professional taxes and withhold and pay service tax on behalf of the employees.
• Failure to obtain professional tax registration or pay professional tax may result in fines and penalties that build up over time.
• Professional tax on occupations, trades, callings, and employment is collected by local and state governments. No more than. ₹2500 in professional taxes are collected annually.
• Compliance with tax regulations for professionals is easy. Professional tax registration may be obtained quickly, and submission can be handled easily.
• The taxpayer may be able to ensure a deduction from remuneration due to professional tax payments. In the year when the employee pays the tax, the expert tax finding will be valid.

Hence, it’s beneficial to opt for professional tax registration online. Not only is it easier, but has a wide range of other advantages.

Difference Between a Professional Tax Enrolment Certificate and Professional Tax Certificate of Registration 

The PTEC registration process and PTRC registration process are contrasted in the table below:

Also Read: Income Tax in India: Basics, Slabs and E-filing Process 2023

Professional Taxation In Different Indian States

Karnataka:

The Karnataka Taxes on Professionals, Trade, Callings, and Employment Act of 1976, governs professional tax. Here, there is only one rate.

Hence, the component rates are remarkably less multifaceted. If your monthly income increase exceeds ₹15,000, you must pay ₹200 in the master evaluation each month. If you don’t earn ₹15,000 every month, you don’t have to pay the tax.

Maharashtra:

The Maharashtra State Tax on Professionals, Trades, Calling and Employment Act, 1975, governs professional costs in Maharashtra. Every agent and specialist who receives a monthly salary of more than ₹7500 must pay tax.

Those who earn between ₹7500 and ₹10,000 per year must continuously pay ₹175, while those who make more must do so monthly at a rate of ₹200. This rate increases to ₹300 in February, considering the fewer days in the month. A portion of the professionally constructed tax might now be completed online.

Andhra Pradesh:

The Andhra Pradesh Tax on Professionals, Trade, Callings, and Employment Act, 1987, addresses professional tax. Only those who consistently earn ₹15,000 or more must pay a calling fee, which begins at ₹150 and rises to ₹200 for those who routinely make ₹20,000 or more.

West Bengal:

The West Bengal Tax on Professionals, Trade, Callings, and Employments Act of 1979 governs professional tax. For individuals earning over ₹8500, West Bengal’s chunk rates begin at ₹90 per month. Only those who constantly purchase above ₹40,000 are subject to the most basic charge, which is ₹200.

Consequences of the Violation of Professional Tax Regulation

The penalty is assessed to anyone who fails to file their professional tax return. All states have penalties for anyone who doesn’t register for professional taxes even after they become applicable. The fine for failing to pay this professional tax differs from region to region. If the professional tax enrollment certificate registration is late, a penalty of ₹5 per day is applicable. A fine of 10% of the tax due is applied for the nonpayment or late professional tax payments. An individual must pay a penalty of ₹1000 for filing returns late. After one month, the penalty will increase to ₹2000.

Who is Exempted from Professional Tax?

The following conditions and people are free from paying the professional tax to their state government:

• Parents of children who have mental or permanent disabilities.
• Those serving in the state who are members of the services as defined by the Army Act of 1950, the Air Force Act of 1950, and the Navy Act of 1957, including auxiliary forces or reservists.
• Employees of the textile sector who are Badli.
• People with a physical impairment that cannot be overcome (including blindness).
• Families of people with mental disabilities.
• People older than the age of 65.

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Conclusion:

All earning inhabitants of the state are required to pay professional tax if they fall under the tax brackets established by the state legislature. As was previously noted, it is not a tax levied by the central government like income tax. It is exclusively collected by a specific number of states in India. Since companies deduct professional taxes from employees’ salaries, employees do not have to contribute professional taxes out of pocket. Self-employed individuals whose income falls within the professional tax bracket are required to pay the appropriate amount to their respective state government agencies and get a Professional Tax Certificate of Registration.

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