Professional Tax

Professional Tax is a tax levied on professions and trades in India. It is a state-level tax and has to be compulsorily paid by every member of staff employed in private companies. The owner of a business is responsible to deduct professional tax from the salaries of his employees and pay the amount so collected to the appropriate government department.

Some of the State Governments have represented that the earlier celling of two hundred and fifty rupees which was fixed in 1949, needs to be revised upwards taking into consideration the price rise and other factors. It is also pointed out that the profession tax has, at present, become almost regressive because of the ceiling since even people with high salaries have to pay this tax at only the maximum amount of two hundred and fifty rupees per annum. The upward revision of profession tax has helped the State Governments in raising additional resources.

Reasons to Obtain Professional Tax Registration

• Statutory Requirement

Employers in certain states are required to mandatorily obtain professional tax registration, deduct and pay service tax on behalf of employees.

• Avoid Penalty

Failure to obtain professional tax registration or remit professional tax could result in fines and penalties that accrue over time.

• Easy Compliance

Compliance with professional tax regulation is easy. Professional tax registration can be obtained easily and compliance maintained easily.

• Tax Deductible

A deduction from salary can be claimed by the taxpayer on account of professional tax paid. The deduction for professional tax will be allowed in the year in which the tax is actually paid by the employee.

• State Government Tax

State Governments and Local Authorities are empowered to collect professional taxes on professions, trades, callings and employment. The amount of professional tax collected does not exceed Rs.2500 per annum.

• Acknowledgement of Online submitted form along with the printout of the originally submitted form
• Self Attested Copy Of PAN Card
• Proof of the Constitution of Business
• Proof of the Residence of the Partners, Director & Proprietor
• Proof of the Place of Business (Address Proof)
• Blank Cancelled Cheque
• Shop and Establishment Certificate
• PAN and PTEC Details of all the Partners or Directors