What is Professional Tax?
Professional tax is a tax imposed by the state government on salaried individuals, including professionals such as lawyers, doctors, and chartered accountants, based on their employment, trade or profession. The rates of professional tax vary across states, but the maximum amount that can be charged annually is Rs. 2,500.
Eligibility of Professional Tax
Professional Tax is levied on individuals who are salaried and work in either government or non-government organizations, as well as professionals such as Chartered Accountants, Doctors, Lawyers, and those who conduct any form of business.
Rietway Consultants Professional Tax Package
The Services which are included in our package are as Follows:
✅ Consultation
✅ Preparation of Documents
✅Application Filing
✅ Professional Tax Registration
Documents Required for Professional Tax Registration
The documents required for obtaining a Gumasta License include Certificate of Incorporation, Partnership Deed, or MSME registration document, as well as the Memorandum of Association and Articles of Association of the company. A copy of the company’s PAN card and identification and address proof documents for all partners involved must be provided. The number of employees working in the establishment must be disclosed, and proof of the registered office, such as an electricity bill, must also be submitted.
Professional Tax Procedure
Step -1 Arrange all Required Documents: The first step is to arrange all the documents and send the same over the email / WhatsApp to us. Once all the Documents are Received, we will Start the Further Process.
Step – 2: Preparation of Documents: The Next Step is Preparation of Documents to be Submitted at Department.
Step – 3: Filling of Application For Professional Tax: The next Step is Filling Of Application for Professional Tax.
Step – 4: After Scrutiny and approval of the application Department Issues Professional Tax.
Benefits of Professional Tax Registration
Is A Judicial Requirements
As per the rules and regulations of India, every employee is bound to make the professional tax payment without fail. Employers in many states of India are strictly bound by the judiciary to obtain the registration of professional tax. After the registration, they have to make the deductions and pay the service taxes of all the employees who work under them.
To Avoid Paying Penalties
Failure to professional tax registration results in huge penalties that keep on increasing over time.
Easy To Comply
When something is easy to comply, it won’t be difficult to follow. The professional tax regulations are so easy to follow that and not difficult to comply with. The registration procedures can be done quickly and the further proceedings are also much easier.
Deductions
Deductions can be claimed in the salary on the basis of the professional tax paid. The deductions will be allowed in the year corresponding to which the taxpayer made the payments.
The State Government Tax
The local authorities and the state government have the right to collect all the professional taxes based on employment, profession trades and much more. The collected amount of professional tax per annum should not go beyond Rs. 2500 per an annum.
Who are exempted from paying Professional Tax?
Under the Professional Tax Rules, certain individuals are exempted from paying professional tax, including parents of children with mental or permanent disabilities, members of the armed forces as designated in the Air Force Act, Navy Act, and Army Act, individuals with permanent physical disabilities, individuals over the age of 65, badli workers in the textile industry, women exclusively engaged as agents under the Directorate of Small Savings or Mahila Pradhan Kshetriya Bachat Yojana, and guardians or parents of mentally challenged individuals.
What are the consequences of Professional Tax violation?
The penalty for not registering for professional tax may vary from state to state as per their legislation. All states will be subject to a penalty if they fail to register after the professional tax legislation becomes applicable. Penalties may also be imposed if payments are not made by the due date or if the return is not filed within the specified deadline. Additionally, if an employer fails to provide their statement and documents within 10 days of receiving notice, their registration may be cancelled.
FAQs on Professional Tax Registration
What is the difference between a professional tax and income tax?
Income tax is a direct tax collected by the central government from all taxpayers. It is charged on a certain percentage of their income. Whereas, professional tax is an indirect tax collected by the state government. It is charged based on a slab for people engaged in business, occupation, or employment.
What is the slab of professional tax?
Each Indian state prescribes its slab for professional tax. For example: In Maharashtra, if your monthly income is between Rs.7,500 to Rs.10,000, then the professional tax levied is Rs.175. Similarly, for monthly incomes above Rs.10,001, the tax levied is Rs.200 for 11 months and Rs.300 on the 12th month. Finally, when the monthly salary is less than Rs.7500, there is no professional tax imposed.
What is the due date of a professional tax return?
Every person who is liable to pay professional tax must file returns by December 31st of each year.
Is professional tax registration mandatory?
Any employer in particular states must deduct taxes from the employees if the salary paid exceeds the minimum slab limit and deposit with the government. That entity is required to get a registration certificate.