Professional Tax Registration - Get Compliant from Day 1

Objective of Professional Tax

The objective of professional tax is to generate revenue for the state government to support various socio-economic and infrastructural development programs. It is a nominal tax that acts as a source of revenue for the government. Moreover, the professional tax encompasses two main components as discussed below:

• Employer Acquiring Professional Tax Registration Every employer, including business entities, is eligible to acquire the professional tax registration from the respective state governments. However, it shall be payable to the State government on an annual basis of the amount of Rs. 2500/- by the employer.
• Employee Making Payment of Tax Amount Every employee whose income is mentioned under the state tax slab rate is eligible to pay the maximum amount of tax, as prescribed by the respective state governments. However, the amount so prescribed under the professional tax must be deducted from the salary of the employee and paid to the government.

Types of Professional Tax Certificates

The different types of professional tax certificates in India are as listed below:

• Professional Tax Enrolment Certificate (PTEC) Professional Tax Enrolment Certificate (PTEC) applies to self-employed business entities like public/private companies, sole proprietorships, partnership firms, and professionals. It allows an entity or individual to pay their own professional tax.
• Professional Tax Registration Certificate (PTRC) Professional Tax Registration Certificate (PTRC) applies to government and non-government employers responsible for deducting tax from their employees’ salaries and remitting it to the government. It allows employers to deduct professional tax from employees’ salaries and remit it to the government.

Entities Exempted from Profession Tax Return Filing

The entities and individuals exempted from profession tax return filing under the Professional Tax Rules of India are as discussed below:

• Parents of children with permanent disability or mental disability
• Senior citizens who are more than 65 years of age
• Individuals with permanent physical disability (including blindness)
• Parents or guardians of mentally or physically challenged individuals/ children
• Badli workers in the textile industry
• Charitable institutions or persons employed in such institutions
• Persons earning below the prescribed income threshold
• Women exclusively engaged in household activities
• Women exclusively engaged as an agent under the Mahila Pradhan Kshetriya Bachat Yojana (MPKBY), or Director of Small Savings
• Persons with temporary employment
• Individuals engaged in agriculture, horticulture, animal husbandry, or fishing
• Professionals employed specifically within the textile industry
• Members of auxiliary/ armed forces or reservists serving in the state

Who is Eligible for Profession Tax Return Filing?

The entities/ persons eligible for the profession tax return filing are as discussed below:

• An individual or a legal person, carrying freelancing business without employees
• Owners of sole proprietorships, corporations, and partnership firms
• Public/ Private/ One-person Companies
• Co-operative societies, clubs, and associations
• Association of Persons (AoP)/ Group of persons
• Hindu Undivided Family (HUF)
• Branch offices of foreign companies

Procedure for Company Professional Tax Registration

The procedure for company professional tax registration, varying from state to state, is as discussed below:

• Determine Applicability The applicants are initially required to visit the official website of the concerned state government and determine the applicability based on the nature of their business or profession.
• Apply Application The applicant is further advised to apply to the concerned state government’s commercial tax department website. However, a copy of the same shall also be submitted to the concerned tax department.
• Upload Documentation The applicants are further required to upload all the necessary documents needed for the registration of the professional tax liability in India.
• Verification by Authorities Once all the documents and application are submitted, the authorities or the respective tax officer shall verify and scrutinize the application, ensuring the accuracy of information.
• Issuance of Registration Certificate Upon successful verification, the authorities shall issue a professional tax registration certificate or an enrolment certificate.
• File Periodic Returns Once registered, the applicants are advised to begin filing periodic tax returns before the scheduled due dates.

Consequences of Non-Compliance with Professional Tax Norms

The individual who defaults in the timely payment of the professional tax would be liable for a penalty as specified by the state government. However, the consequences for non-compliance with the professional tax regulations, which vary from state to state, are as discussed below:

• Failure to Obtain Registration
  Any failure or delay in obtaining professional tax registration attracts a penalty of Rs. 5 per day along with interest, as prescribed.
• Late Deposition
  Any late deposition or filing of professional tax attracts a penalty, levied due to a delay in depositing the required amount to the government.
• Non-Deposition of Amount
  Failure to deposit professional tax can lead to recovery with interest and penalties. However, the authorities may attach the defaulter’s bank account, and in serious cases, initiate prosecution.
• Failure to Initiate Payment
  Any failure to initiate payment within the due date attracts a penalty of 10% of the amount of tax along with an interest of 1.25% per month.

Due Date for Payment of Professional Tax in India

In case your employment date is on or before the 31st of May of the year, your due date for the payment of professional tax in India will be the 30th of June of that year. However, in case if you enrolled after the 31st of May, the due date must be within 1 month from the date of enrolment.

Time Taken for Professional Tax Registration

It often takes around 5 to 10 working days for professional tax registration in India. However, the timeline is further subject to government processing, approval time, public holidays, etc.

Fees for Professional Tax Registration

The fees for professional tax registration vary from state to state. Most small businesses would prefer to go to a single location for payroll, tax practice, income tax reporting, bookkeeping, and financial statement filing. For fee details, contact the Corpbiz team.

Why Trust Corpbiz for Professional Tax Registration?

Corpbiz stands out as a popular partner, having assisted over 50,000+ businesses and professionals across India. Connect us now to simplify your professional tax registration journey. Below are some of the reasons for partnering with Corpbiz for the online registration of professional tax in India:

• Resolves queries regarding professional tax registration
• Empowered 20,000+ self-employed individuals and businesses with professional tax registration
• Seamless application filing and accessibility within 24 to 48 hours
• Conducts AI-assisted document checks, ensuring accuracy and compliance
• Provides 24/7 customer expert assistance and real-time updates
• Guarantees end-to-end data security and confidentiality of sensitive business information
• Guarantees auto-renewal before the lapse of deadlines and due dates
• Seamless online documentation with no physical visits
• Offers legal backup and advisory services with 5-star ratings