Overview of Professional Tax Registration

Professional tax is mandatory for individuals earning income from salary or professions like Company Secretaries, Doctors, Chartered Accountants, Lawyers, Contractors, Architects, and various entities including Private Limited Companies, LLPs, Proprietorships, and HUFs.

The tax amount is fixed and varies by state, with some states not imposing it at all.

Applicable States: Karnataka, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, Bihar, Sikkim, Nagaland, Manipur, Mizoram, Jharkhand, etc.

Employer Registrations:

1. Certificate of Enrollment (EC): Business entities must obtain this within 30 days of commencing operations.

2. Certificate of Registration (RC): Employers need this for employee payroll within 30 days of the first employee's joining date.

Frequently asked questions

Is there a separate registration that needs to be taken for each branch?

Each branch of a firm, company, corporation, society, club, or association is considered a distinct entity for tax purposes, requiring separate registration and compliance with tax liabilities.

When to file the annual return of professional tax?

This refers to the payroll tax deducted from employees' paychecks and held by the employer on their behalf. It represents a liability because the employer collects taxes from employees and is responsible for remitting these amounts to the government.

Who is exempted from paying professional tax?

Certain individuals, including those aged 65 or above, salaried or wage-earning deaf and dumb individuals, and those with a permanent disability of at least 40%, are exempt from paying professional tax.

How is professional tax calculated?

Professional tax is levied based on the income slab of professionals, with no tax applicable for incomes below a certain threshold. The maximum annual professional tax per employee is capped at Rs. 2,500, with varying tax slabs across different states.