Overview of Professional Tax Registration

The term “Professional Tax” denotes the tax imposed by the State Government on individuals for utilizing the infrastructure provided by the State to carry out their professional activities efficiently. This tax is levied on all types of professions, trades, and employments, and is based on the income of the individual.:

• Profession,
• Trade, and
• Employment

The levy of Professional Tax is subject to variation depending on the state in question. Each state enforces its own set of rules and regulations to govern the tax, with a slab system based on income being a common feature across all states. Individuals operating freelance businesses without any employees are required to procure a Professional Tax certificate if it falls within the pecuniary threshold set by the concerned State Authorities.

Types of Professional Tax Certificates

The types of Professional Tax Certificates are enlisted below:

• PTEC (Professional Tax Enrolment Certificate)

 This type of professional tax is paid by the business entity, i.e. Private/ Public Limited Company, owner or a professional, i.e. Sole Proprietor or Director Etc. through this certificate 

• PTRC: (Professional Tax Registration Certificate)

Here, the Government or Non- Government employer deducts the tax from the employee’s salary and deposits the same to the government.

Note: A professional tax imposed is subject to the exemption provided by the respective State to particular categories.