Professional Tax Registration
Get hassle-free Professional Tax Registration with expert support. Stay compliant, avoid penalties, and ensure smooth business operations. Fast, reliable, and affordable service tailored for businesses and professionals. Contact us now to start your registration and get a free consultation!
Pricing Summary
- Documents Preparation
- Application Filing
- Issuance of Professional Tax Certificate
- 12000+ Customers served
- 75% Customers recommend us
- 4.7+ Google Rating
Professional Tax Registration : Overview
Professional tax (PT) is a state-level tax levied on individuals and entities engaged in professions, trades, or employments within India. Unlike income tax, which is regulated by the central government, professional tax is governed by individual state laws. This means the rules, rates, and procedures can vary significantly across states.
What Is Professional Tax?
Professional tax is a tax imposed by state governments on individuals and entities engaged in various professions, trades, or employments. The tax is typically deducted at source by employers from employees’ salaries and remitted to the state government. Self-employed individuals and business owners are also required to pay professional tax directly.
The amount of professional tax payable varies depending on the state and the income level of the individual or entity. Some states have fixed slabs, while others have progressive rates based on income brackets.
Who Needs to Register for Professional Tax?
1. Employers
All employers, including private companies, government entities, and non-government organizations, must register for professional tax and deduct the applicable tax from their employees’ salaries. This applies to businesses of all sizes, from small proprietorships to large corporations.
2. Employees
Salaried employees earning above a certain threshold, as specified by the respective state, are liable to pay professional tax. The employer deducts this tax from the employee’s salary and remits it to the state government.
3. Self-Employed Individuals
Professionals such as doctors, lawyers, chartered accountants, and consultants are required to register and pay professional tax based on their income. This applies even if they do not have employees.
4. Business Owners
Sole proprietors, partnership firms, limited liability partnerships (LLPs), and companies engaged in trade or commerce are also required to register and pay professional tax.
5. Freelancers
Individuals offering freelance services across various sectors must comply with professional tax regulations, subject to the income thresholds set by the state.
Fees and Documents Required for Professional Tax Registration
Fees For Professional Tax Registration
- Documents Preparation
- Application Filing
- Issuance of Professional Tax Certificate
Documents Required for Professional Tax Registration
- PAN Card of the Proprietor/Directors or Partners
- Adhaar card photograph of the Proprietor/Directors or Partners
- Photograph of the Proprietor/Directors or Partners
- Business Address Proof (e.g., utility bill or rent agreement).
- Cancelled Cheque or Bank Statement.
- Signature on Blank Paper for record and verification.
- PAN Card of the company/firm – if any
- Certificate of Incorporation (including MOA and AOA for companies, or partnership deed for firms) If any
- Board Resolution authorizing the signatory (for companies) – If Any
How to Register for Professional Tax in India
The process of registering for professional tax varies from state to state. However, the general steps involved are as follows:
1. Determine Applicability
Before initiating the registration process, determine if your business or profession is liable to pay professional tax. This depends on factors such as the nature of your business, the number of employees, and the income levels.
2. Obtain Necessary Documents
Gather all required documents for registration. Commonly required documents include:
- Proof of Identity: Aadhar card, PAN card, or passport.
- Proof of Address: Utility bills, rental agreements, or bank statements.
- Business Documents: Certificate of incorporation, partnership deed, or LLP agreement.
- Employee Details: Salary records and employment contracts.
3. Submit Application
Most states provide an online portal for professional tax registration. Create an account on the respective state’s professional tax portal and fill in the necessary details. Upload the required documents and submit the application.
4. Verification and Approval
The state tax department will verify the submitted application and documents. If everything is in order, they will issue a Professional Tax Registration Certificate (PTRC) or Professional Tax Enrollment Certificate (PTEC), depending on your status as an employer or employee.
5. Display Registration Certificate
Once obtained, display the registration certificate prominently at your place of business. This serves as proof of compliance with professional tax regulations.
Penalties for Non-Compliance
Failure to register for professional tax or remit the tax on time can result in significant penalties. Common penalties include:
- Late Registration: A penalty of Rs. 5 per day for delayed registration.
- Late Payment: Interest at 1.25% per month and a penalty of 10% of the outstanding amount.
- Late Filing of Returns: Rs. 1,000 for delays up to one month; Rs. 2,000 for delays exceeding one month.
In addition to financial penalties, non-compliance can lead to legal actions, including the attachment of assets and prosecution in serious cases.
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.
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.
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
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 |
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.
