State governments levy a tax known as the professional tax on all salaried individuals. Professional tax applies to all working professionals, including certified public accountants, attorneys, and physicians. It is assessed based on a person's occupation, trade, or profession. The tax rates vary by state, but the maximum annual professional tax that can be assessed is 2,500.
Professional tax relevance: All crafts and professions in India are subject to professional taxation. Every employee of a private company operating in India is required to pay this tax. Every business owner is responsible for registering for professional tax, as well as deducting and paying professional tax.
Professional tax for independents: Any professional with a consistent monthly income must pay the professional tax. By the term professional, we refer to those who work in specific professions such as accounting, the media, etc.
A few persons are exempt from professional tax regulations; the exemptions vary based on your state of residence. The professional tax rules exempt the following individuals from payment:
• Parents of children with a mental or permanent handicap • Members of the armed forces • Individuals with a permanent physical disability • Age varies by state • Badli workers in the textile sector • Women working exclusively as agents for the directorate of small savings or Mahila Pradhan Kshetriya Bachat Yojana
• Guardians or parents of individuals with intellectual disabilities
Here are the reasons why a professional tax payment should never be missed:
Employers in numerous Indian states are mandated by the judiciary to obtain professional tax registration. After registering, they are required to deduct and pay the service taxes for all of their subordinate employees.
• Avoid paying penalties: failure to register for tax purposes results in enormous penalties that increase over time.
The professional tax requirements are so straightforward to comply with. The registration process can be completed fast, and the subsequent steps are also simplified.
• Deductions: Salary deductions can be claimed based on the professional tax paid. The deductions will be allowed in the tax year corresponding to the year in which the payments were paid.
Local authorities and the state government have the authority to collect all professional taxes depending on employment, profession trades, and other factors. The annual amount of professional tax collected should not exceed £2500 each year.
Documents Required for Tax Registration for Professionals - Mumbai
• PAN card of company/LLP attested by the company director • Proof of office location with NOC from the owner of the premises • Proof of company bank account with bank statement and cancelled cheque • Passport size photograph, address and identity proof from all the directors • Board resolution/ statement of consent by the partners • Shop and establishment certificate
• Step 1: PAN card, address, and identity proof of all the directors/partners/proprietors of the company must be provided. • Step 2: All the employee details must also be provided. • Step 3: The application form for professional tax must be filled by the employees. • Step 4: Our experts will submit it to the appropriate authorities. • Step 5: We will provide the basic acknowledgement within 5 to 7 working days. • Step 6: The registration hard copy will be issued within 7 working days.
Firms, LLPs, corporations, societies, HUFs, associations, clubs, and corporations are taxable entities for purposes of professional tax. Under professional tax, each of these branches will likewise be considered independent individuals.
Individuals (Professionals) Legal practitioners such as notaries and solicitors, medical representatives such as dentists, medical consultants, and doctors, as well as other professionals such as management consultants, tax consultants, surveyors, company secretaries, chartered accountants, insurance agents, engineers, architects, and contractors, are considered professional individuals who are required to pay professional tax.
Partners and Board Members
Professional tax should be paid by company directors, firm partners, LLP partners, and designated partners. They must register under the Professional Tax Act within 30 days of assuming these positions.
The company/firm must obtain a professional tax enrollment certificate (PTEC) within 30 days of incorporation by registering on the government portal.
A professional tax registration certificate (PTRC) is required within 30 days of hiring a new employee.
Employers are required to deduct professional tax from the salaries of their employees and submit it to the department of professional tax when filing returns.
• Employers are required to deduct professional tax from the salaries of their employees and submit it to the department of professional tax when submitting returns. The employer must register with the professional tax department within 30 days of the law's implementation.
Though the precise penal interest or penalty can vary depending on each state's legislation board, all states will be assessed a penalty if they have not registered following the implementation of the professional tax legislation. Additionally, penalties will be assessed if the payments are not made or the return is not filed by the prescribed due date.
We at GSTe-Services are always prepared to assist you. Here are some of the ways we may assist you with online tax registration for professionals:
Developing an application
Preparing the application might be a challenging undertaking, since the phrases and regulations can be tough to comprehend. Our competent tax consultants conduct an accurate evaluation of the firm and develop a document for filing a tax return with the respective state government.
Completing the application form
Then, our specialists will complete the form and submit it to the appropriate department in the particular city or municipality.
The relevant state government will subsequently conduct a comprehensive review of the application (s). Once approved, your professional tax registration is complete.
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