Overview
Professional tax is imposed by the state government in India. It is imposed on individuals making money through professions, jobs, trades, etc. Employers need professional tax registration to deduct professional tax from salary of workers and remit it to the concerned state government. The rate of professional tax vary by state. Although, professional tax is mentioned in Article 276 of the Indian Constitution, but the state governments have the authority to make laws relating to it. Many states in India do not impose any kind of professional tax.
What is Professional Tax registration?
Every working individual is liable to pay a part of his/her income to the concerned state government in the form of professional tax. It is generally mentioned in salary slip of individuals. A company can directly deducts this amount as a professional tax from monthly salary of an employee, if it has professional tax registration. In addition to salaried individuals, other professionals directly pay it to the state government. You can also claim a tax deduction for professional tax paid as per the Income Tax Act 1961
Documents Required For Professional Tax Registration
We are mentioning a list of essential documents for registration of professional tax
- You need to submit both the online and hard copy of the application form.
- Certificate of Incorporation (COI), Articles of Association (AOA), and Memorandum of Association (MOA) of Companies. PAN card of the company is also required, and it must be attested by the Director.
- Self-attested PAN card is needed for Proprietorship firms to obtain a professional tax registration.
- Details of all Directors and employees of the company along with their identity proof and proof of address, and passport-size photos.
- Bank account details, Bank statement, and cancelled cheque of the company.
- Registered Office proof, if it is rented property, an NOC from the owner is required.
- Other details, like Board Resolution of companies, Declaration of consent by all the Partners of a partnership firm, and salary and attendance records. You can consult any top tax consultant in India for this registration.
Step-Wise Process for Professional Tax Registration
Read the complete process of registration of professional tax
- You must provide PAN card, proof of address and identity of all the directors/partners/proprietors of the company.
- Furnish all the details related to employees of the company.
- Each employee need to fill the application form for professional tax.
- Submit all the documents with help of the best professional tax registration company to the concerned officer appointed by the state government.
- You will get hard copy of the registration within 10 to 20 days.
Who has the power to levy professional tax in India
Although Article 276 of the Indian Constitution entrusted the Parliament to make rules and laws regarding taxes imposed on an individual, but it is an exception in the case of professional tax. All states of India have the power to impose this tax, even though many states do not levy professional tax, top tax consultant in India can provide you with the best advice regarding professional tax. It is collected by the Commercial Tax Department of the state government.
Consequences of Non-Payment of Professional Tax
Wherever professional tax is applicable, you must need to register for professional tax, otherwise state government may impose penalty. States have the exclusive right to decide the exact amount of penalty for non- registration of professional tax. Best professional tax registration companies offer various services regarding management of professional tax for businesses.
There are also provision of penalties for non-submission of the professional tax return by the deadline given by the state governments. You may face fines, late fees, or imprisonment for non-registration of professional tax, paying late tax, or filing returns beyond the provided deadline by the respective state government. Generally companies take help of professionals providing professional tax registration services to avoid any unwelcome and strict legal action by the government.
Who is not required to pay professional tax?
The professional tax rules gives exemptions to few individuals. The exemptions provided by the state government differ by states. Generally professional tax exemptions are provided to the following individuals:
Parents of children suffering from mental or permanent disability
Members of the armed forces
Persons with permanent physical disability
Many states provide exemptions to different age group individuals. The best professional tax registration companies provide advice to businesses regarding better management of professional tax.
Various states provide professional tax exemptions to workers engaged in certain kinds of industries.
A few states provide professional tax exemptions to Women engaged exclusively as an agent under the directorate of small savings or involved in various financial saving activities of the government.
Proprietorship Registration
