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Professional Tax 2018-06-21T11:02:25+00:00

Professional Tax Registration

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.

Professional tax is usually a slab-amount based on the gross income of the professional. It is deducted from his income every month. Some of the state governments that have levied professional tax are Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh. In case of salaried employees and wage earners, Employer is liable to deduct professional tax with the State Government. In case of other class of Individuals, this tax is liable to be paid by the person himself.

Reasons to Obtain Professional Tax Registration

Avoid Penalty

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

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.

Easy Compliance

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

Statutory Requirement

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

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.

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