Professional Tax Registration and Compliance

What is Professional Tax?

Profession Tax is a state-level tax that applies to salaried employees and professionals, including chartered accountants, lawyers, and doctors. The following states impose this tax: Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura, and Madhya Pradesh. Registration is mandatory within 30 days of employing staff in a business or, in the case of professionals, 30 days from the start of the practice. This tax needs to be deducted from the salary or wages paid; the amount varies by state and amount but is capped at Rs. 2500 per annum.

Professional Tax Registration and Returns

The professional tax registration application must be to the State’s tax department within 30 days of employing staff in the business. If there is more than one place of work, the application must be made separately to each authority as regards the place of work coming under the jurisdiction of that authority.

Application for the Registration Certificate should be made to the assessee’s state tax department within 30 days of employing staff for his business. If the assesse’s has more than one place of work, then an application should be made separately to each authority with respect to the place of work under the jurisdiction of that authority.

If an employer has employed more than 20 employees, he is required to make the payment within 15 days from the end of the month. However, if an employer has less than 20 employees, he is required to pay quarterly (i.e. by the 15th of next month from the end of the quarter)

Who is Responsible for Deducting Professional Tax?

An employer is the person responsible to deduct and pay professional tax to the State Government subject to monetary threshold if any provided by respective State’s legislation employer needs to register and obtain both professional tax registration certificate to be able to pay professional tax on his trade/profession and professional tax enrolment certificate to be able to deduct the tax from his employees and pay. Further, separate registration may be required for each office depending on the respective State’s legislation.

Consequences

Fails to Get Registration

Will be liable to a penalty for the period during which he remains unregistered.

Fails to Deposit to the Government/ Late Deposition

Will be liable to a penalty for the period during which he remains unregistered.

Non-Deposition of Amount.
The officials have power to recover such amount along with applicable penalty and interest from the assets of such defaulter. Moreover, they can attach his bank account also. In serious cases, prosecution case also can be filed.

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Professional Tax Registration and Compliance
Article Name
Professional Tax Registration and Compliance
Description
Profession Tax is a state-level tax that applies to salaried employees and professionals, including chartered accountants, lawyers, and doctors