- Professional tax registration is a state level levy required for employers and persons engaged in any profession, trade or calling and has to be compulsorily paid by every member of staff employed in private companies.
- Some of the state governments that have levied professional tax are Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh.
- For salaried employees the owner of a business is responsible for deducting professional tax from the salaries of his employees and paying the amount so collected to the appropriate government department.
- In case of other class of Individuals, this tax is liable to be paid by the person himself e.g. professionals including chartered accountants, lawyers and doctors etc.
- Professional tax is usually a slab-amount based on the gross income of the professional. It has a maximum ceiling of Rs. 2500 per annum.
- Registration is mandatory within 30 days of employing staff in a business or, in the case of professionals, 30 days from the start of the practice. If a business has employees in more than one state it needs to register individually in every state where the business operates
HOW WE CAN HELP YOU
- We can help you register yourself as an employer under the relevant authority the state. Typically there will be two registrations – first as a legitimate business and secondly as an employer. Applying for a professional tax number is a onetime process and when they are issued their registration certificate along with a unique professional tax number, the same is to be quoted while submitting the requisite tax amount at the end of each financial year.
- Once registered we help you in the process of complying with the provisions of the act in maintaining records and submitting returns. The frequency of return filing depends on the state you’re in. For example, in Maharashtra, returns can be filed annually if the liability is under Rs. 5000, quarterly if the liability is under Rs. 20,000 and monthly if it is above Rs. 20,000. However, in West Bengal, returns need only be filed once every year. This is the approach, in fact, many states are moving toward now.
DOCUMENTATION FOR REGISTRATION
Documentation and details vary but are usually along the same lines. For Karnataka the requirements are as follows:
- Certificate of Incorporation, in case of companies
- MOA and AOA in case of companies/Partnership deed in case of partnership firm
- List of Directors/Partners with the details of Name, residential address, photo (2 passport size copies)
- Identity proofs for directors/Partners like, driving licenses, passport, ration card, election card with photos
- List of employees with their gross salary details
- If the directors are not promoters of the company, copy of Form-32 filed with ROC towards appointment as directors
- If there is any change in the address of the company, copy of Form-18 filed with ROC
- If the place of business is a leased premises, lease agreement
- If the place of business is in a own building, tax paid receipt copy
- Fee of Rs.2,500/- towards Profession Tax for the company
- Monthly return in Form-5A along with Profession tax deducted from the employees salary, if any.
- Copy of pan allotment letter/PAN card
- Copy of Bank statement from the date of establishment of the business.
Information required for filling in the content of Form 1 and Form 2
- Name of the Company
- Full Postal Address
- Class of Employer – Individual/Partner/Firm/Company/Corporation/Society/ Club and Association/Others Specify
- Status of the person signing the application – Proprietor/Partner/Principal Officer/Agent/Managers/Director/Secretary/Others specify
- Date of Birth and Age –
- In case of individuals – Date of Birth and age
- In case of Companies – Date of incorporation
- In case of other organizations – Date of commencement of business
- Nature of Business –
- Period of standing in the business – number of years and months
- Number of other places of works with address
- Annual turnover of all sales/purchases
- Number of workers engaged in the factory
- Number of employees in the establishment
- If Co-operative society – State level/District level/Taluk level
- Number of Vehicles for which permit under M.V. Act is held – 3 wheelers/ Trucks/Buses
- Enrolment number of previous certificate, if any
- Ground on which revision, if any, is sought
Profession Tax & Slab Rates around India
Profession Tax in Maharashtra
In Maharashtra, profession tax is governed by the Maharashtra State Tax on Professions, Trades, Calling and Employment Act, 1975. All employees and professionals with a monthly salary of over Rs. 7500 must pay profession tax. Those with a salary of Rs. 7500 to Rs. 10,000 must pay Rs. 175 per month, while those with a higher salary must pay Rs. 200 a month (Rs. 300 in February). Payment of the profession tax that is collected can now be made online.
Profession Tax in Tamil Nadu
Profession tax is governed by the Town Panchayat, Municipalities and Municipal Corporation Rules, 1988. The slab rates are as follows: All employees and professionals with a monthly salary of over Rs. 3500 must pay profession tax, starting at just Rs. 16 per month and going up to Rs. 182 per month for those earning over Rs. 12,501.
Profession Tax in Karnataka
Profession tax is governed by the Karnataka Tax on Professions, Trade, Callings and Employment Act, 1976. The slab rates are much simpler here, as there is only one rate. If you earn over Rs. 15,000 a month, you must pay Rs. 200 a month as profession tax. If you do not earn Rs. 15,000 a month, you don’t pay it at all.
Profession Tax in West Bengal
Profession tax is governed by the West Bengal Tax on Professions, Trade, Callings and Employment Act, 1979. Slab rates in West Bengal start at Rs. 90 a month, for those earning a salary of over Rs. 8500 per month. The highest rate, of Rs. 200, only kicks in for those earning over Rs. 40,000 per month.
Profession Tax in Andhra Pradesh
Profession tax is governed by the Andhra Pradesh Tax on Professions, Trade, Callings and Employment Act, 1987. Only those earning Rs. 15,000 and over per month need pay profession tax, which starts at Rs. 150, and is raised to Rs. 200 per month for those earning over Rs. 20,000 per month.
Profession Tax in Gujarat
Profession tax is governed by the Gujarat Panchayat, Municipalities, Municipal Corporations and State Tax on Professions, Traders, Callings & Employment Act, 1976. The tax starts at Rs. 80 per month for those earning over Rs. 6,000 per month, going up to Rs. 150 per month for those earning over Rs. 9000 and Rs. 200 per month for those earning over Rs. 12,000.