Professional Tax Registration
Professional Tax Registration is Mandatory in some state and not Having Professional Tax Registration certificate may result of notice and heavy penalties and interest. So any Entity who is starting there own business or profession must should obtain Professional Tax Registration or Professional Tax Enrollment Certificate within 30 day from date of commencement of business. Lets apply for PTEC and PTRC.
Pricing Summary
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- Setupfiling Fee: ₹1499/-
- Govt Fee: ₹300 to 2500/-
- All India Service
- Easy Onlie Process
- 24*7 Hours Customer Support
Professional Tax Registration : Overview
Professional tax is a tax levied by state governments in India on individuals earning an income from salary or practicing a profession, such as chartered accountants, lawyers, and doctors. The tax is deducted from the salary of employees by the employer and is remitted to the state government.
Key Points about Professional Tax
Here are some key points about professional tax:
- Applicable to: Salaried individuals, professionals, freelancers, and those engaged in business.
- Varies by state: The rate and regulations of professional tax differ from state to state.
- Monthly or annual payment: Depending on the state’s rules, it can be paid monthly or annually.
- Maximum limit: The maximum amount of professional tax that can be levied is ₹2,500 per year.
Professional Tax Applicable States across India
Please refer to the following table to know more about the states which impose professional tax in India:
| State where Professional Tax Apply | State where Professional Tax Not Apply |
| Andhra Pradesh | Central |
| Assam | Andaman and Nicobar Islands |
| Bihar | Arunachal Pradesh |
| Gujarat | Chandigarh |
| Jharkhand | Chhattisgarh |
| Karnataka | Dadra and Nagar Haveli |
| Kerala | Daman and Diu |
| Madhya Pradesh | Delhi |
| Maharashtra | Goa |
| Manipur | Haryana |
| Meghalaya | Himachal Pradesh |
| Mizoram | Jammu and Kashmir |
| Nagaland | Ladakh |
| Odisha | Lakshadweep |
| Pondicherry | Rajasthan |
| Punjab | Uttar Pradesh |
| Sikkim | Uttarakhand |
| Tamil Nadu | |
| Telangana | |
| Tripura | |
| West Bengal |
Types of Professional Tax Registration Certificates
1. 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
2. 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.
Professional Tax Enrollment vs Professional Tax Registration
The terms “professional tax enrollment” and “professional tax registration” refer to two different certificates required for compliance with professional tax regulations in India. Here’s a breakdown of the differences:
Professional Tax Enrollment Certificate (PTEC):
- Who Needs It: Self-employed individuals, professionals (like doctors, lawyers, chartered accountants), and business entities.
- Purpose: Allows the entity or individual to pay their own professional tax.
- Applicability: Required for anyone earning income through a profession, trade, or business.
Professional Tax Registration Certificate (PTRC):
- Who Needs It: Employers who have employees.
- Purpose: Allows the employer to deduct professional tax from employees’ salaries and remit it to the government.
- Applicability: Required for businesses or entities that employ staff and need to manage the professional tax deductions for their employees.
In summary, professional tax enrollment (PTEC) is for paying your own professional tax, while professional tax registration (PTRC) is for managing and remitting the professional tax deducted from employees’ salaries.
Benefits of Professional Tax Registration
Registering for professional tax offers several benefits that can positively impact your business. Let’s take a look at some of the key advantages:
- Legal compliance: By registering for professional tax, you ensure that your business operates within the legal boundaries, minimizing the risk of penalties or legal actions.
- Tax deductions and benefits: Registered professionals often enjoy tax deductions and benefits specific to their profession. These include deductions for professional development expenses and access to profession-specific tax credits.
- Credibility and trust: Professional tax registration enhances your credibility and builds trust among your clients. It demonstrates your commitment to ethical business practices and compliance with tax regulations.
- Access to government tenders: Many government projects require bidders to be registered professionals. By being registered, you open up opportunities to participate in these tenders and expand your business prospects.
Documents Required for Professional Tax Enrollment
To enroll for professional tax, you’ll need to submit various documents depending on whether you are an individual, a proprietorship, or a business entity. Here are the general documents required:
For Individuals/Proprietorship:
- PAN Card of the individual.
- Aadhar Card of the individual.
- Address Proof (e.g., utility bill or rent agreement).
- Passport-sized Photographs
- Cancelled Cheque or Bank Statement.
- Signature on Blank Paper for record and verification.
For Companies/Partnerships/LLPs:
- PAN Card of the company/firm.
- Certificate of Incorporation (including MOA and AOA for companies, or partnership deed for firms).
- Address Proof of the business premises (ownership documents or rent agreement with NOC from the owner).
- List of Directors/Partners and their address proofs.
- Bank Account Proof (cancelled cheque and bank statement).
- Board Resolution authorizing the signatory (for companies).
- Signature on Blank Paper for record and verification
Professional Tax Compliance
Professional Tax Rate:
The maximum amount payable per annum towards professional tax is INR 2,500. The professional tax is usually a slab amount based on the gross income of the professional. It is deducted from his income every month.
The Commercial Taxes Department of a state/union territory is the nodal agency that collects professional tax on the basis of predetermined tax slabs which vary for each state and union territory. The tax is calculated on the annual taxable income of the individual; however, it can be paid either annually or monthly.
Who Pays Profession Tax?
In the case of Salaried and Wage-earners, the Professional Tax is liable to be deducted by the Employer from the Salary/Wages, and the Employer is liable to deposit the same with the state government.
Self-employed persons who carry out their profession or trade on their own and fall in the ambit of profession tax are liable to pay the tax themselves to the state government.
Employer’s Responsibility for Professional Tax
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. He/she has to furnish a return to the tax department in the prescribed form within the specified time. The return should include proof of tax payment. In case of not enclosing the payment proof, the register will consider the return incomplete and invalid.
Exemptions for Payment of Professional Tax
There are exemptions provided for certain individuals to pay Professional Tax under the Professional Tax Rules. The following individuals are exempted to pay Professional Tax:
- Parents of children with permanent disability or mental disability
- Members of the forces as defined in the Army Act, 1950, the Air Force Act, 1950, and the Navy Act, 1957 including members of auxiliary forces or reservists, serving in the State.
- Badli workers in the textile industry
- An individual suffering from a permanent physical disability (including blindness)
- Women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings.
Parents or guardians of individuals suffering from a mental disability. - Individuals, above 60 years of age
Due Date to apply for Professional Tax Registration
Within 30 days of hiring workers in a business or, in the case of professionals, within 30 days of beginning the practice, professional tax registration is required.
- Within 30 days of hiring workers for his firm, the applicant must submit an application for the Registration Certificate to the state tax department that will assess his taxes.
- If the assessee has many places of employment, a separate application should be submitted to each body with regard to each location that falls under its authority.
Due Dates for Professional Tax Payment
The payment must be made within 15 days of the end of the month if the employer had more than 20 employees. The payment deadline is the 15th of the month after the end of the quarter if an employer has fewer than 20 employees.
The Process of Professional Tax Registration
Step 1: Filing the Application with Necessary Documents
The applicant must file the application form and the requisite documents.
Step 2: Submitting the Application to the Concerned state Government & Tax Department
The applicant must submit the application to the appropriate state government together with all required paperwork. The tax department should also receive a copy of this.
Step 3: Scrutinization by the Tax Authority
The tax authority must carefully review applications after receiving them to make sure all the information is accurate.
Step 4: Issue of Registration Certificate
The authorities will issue the Registration certificate once all the paperwork have been successfully reviewed.
Penalties Related To Professional Tax Registration
All of these jurisdictions may apply a fine for failure to register for professional tax when professional tax policy is applicable. However, state regulatory law will determine the exact amount of the Penalty.
The PT return must be submitted by the deadline or there will be fines for withholding payments after they are due. The real fine is set by each state’s professional tax laws. Businesses who don’t register for professional taxes, pay taxes after the deadline, or file returns on time risk fines, late fees, or even jail time.
Additional penalties apply if a payment is not made by the due date or a return is not filed by the due date. The following details, for instance, describe the fine amount levied by the Maharashtra government for late submission or failure to file.
Nature of default | Penalty Leviable |
|---|---|
Not obtaining PT registration | Rs.5/- per day |
Late filing of PT return | Rs.1,000/- |
Late payment of PT dues | Interest @1.25% p.m. Penalty @10% |
FAQs about Professional Tax Registration in India
Professional Tax is typically paid on a monthly or annual basis, depending on the state’s regulations.
Yes, many states offer online registration options for Professional Tax.
No, each state in India has its own Professional Tax regulations and rates.
Failure to register for Professional Tax can result in penalties and legal consequences.
Yes, you can cancel your registration by notifying the tax authorities.
