Understanding Professional Tax: Statewise Rates, Registration, and Compliance

PROFESSIONAL TAX Prepared By PAMS Professional Group

2 Professional Tax Is a state tax, Imposed by a state government infrastructure it provided to you so that you can carry out your profession in that state. Under Article 276 (2)of the indian constitution, professional tax is deducted by the employer from the salaries of employee every month and remitted to the state, the maximum amount that can be under this head is Rs. 2,500 Salaried, self-employed companies in Maharashtra are levied with professional taxes on several sources. The Professional Tax slab rates are revised every fiscal year and can be paid online by non-salaried persons. both salaried and self-employed Pay Professional tax. on account of the deducted annually individuals, and About their income from Professional Tax TREY research

3 Government of india also Deducted professional charges on the income earn from various sources. Professionals working in government or non-government sectors, doctors, lawyers, chartered accountant- they all are responsible for paying professional tax and get a certificate of Certificate of Enrolment from the concerned authority. Professional tax Classified in Two parts Like- PTRC & PTEC Professional Tax PTRC PTEC TREY research

4 PTEC PTRC 1. Stands Enrolment Certificate 2. Required for Professional Tax in India 3. DescriptionA certificate obtained by an employer to pay their own professional tax, as well as by professional practitioners such as CAs, Doctors, Architects, etc. to pay their own professional tax. 4. PurposeFor professionals to pay their own professional tax 5. Additional documents required for registration Details of the number of employees, as well as their salary slabs for Professional Tax 1. Stands Registration Certificate 2. Required for Professional Tax in India 3. DescriptionA certificate obtained by an employer to deduct and deposit professional employees salary. 4. PurposeTo deduct and deposit professional tax from employees salary 5. Additional documents required for registration PAN and PTEC Details of all the Partners or Directors for Professional Tax tax from Advocates, TREY research

5 Common documents required for registration 1) Self Attested Copy Of PAN Card & Aadhaar Card 2) Proof of the Constitution of Business 3) Proof of the Residence of the Partners, Director & Proprietor 4) Proof of the Place of Business (Address Proof) 5) Blank Cancelled Cheque 6) Shop and Establishment Certificate TREY research

Professional Tax Rate State Wise 6 Professional tax being levied by the State Government, is different in different states. Every state has its own laws and regulations to govern professional tax of that particular state. However, all the states do follow slab system based on the income to levy professional tax. Article 276 of the Constitution which empowers the State Government to levy professional tax also has provided for a maximum cap of Rs 2,500 beyond which professional tax cannot be charged on any person Professional Slab rate Different State (Mansion in Next Slides) TREY research

7 State Per month Income Tax Rate/Amount (per month) Up to Rs.15,000 Nil Rs.15,001-Rs. 20,000/- Rs. 150 Andhra Pradesh Rs.20, 001/- or above Rs. 200 Up to Rs.10,000/- Nil Rs.10,001/- Rs.15,000/- Rs. 150 Assam Rs.15,001- Rs.24,999/- Rs. 180 Rs.25,000/- or above Rs. 208 Up to Rs.25,000/- Nil Rs.25,001- Rs.41,666 Rs.83.33 Bihar Rs.41,667- Rs.83,333/- Rs.166.67 Rs.83,333/- or above Rs.208.33 Up to Rs.15,000/- Nil Goa Rs.15,001- Rs.25,000/- Rs. 150 Rs.25,001/- or above Rs. 200 Up to Rs.5,999/- Nil Rs.6,000-Rs. 8,999 Rs.80 Gujarat Rs.9,000- Rs.11,999/- Rs.150 Rs.12,000/- or above Rs. 200 TREY research Up to Rs.15,000/- Nil Karnataka Rs.15,001/- or above Rs.200

8 State Per month Income Tax Rate/Amount (per month) Up to Rs.1,999 Nil Rs.2000- Rs.2,999/- Rs.20 Rs.3,000- Rs.4,999/- Rs.30 Rs.5,000- Rs.7,499/- Rs.50 Kerala Rs.7,500-Rs. 9,999/- Rs.75 Rs.10,000- Rs.12,499/- Rs.100 Rs.12,500-Rs. 16,666/- Rs.125 Rs.16,667-Rs. 20, 833/- Rs.166 Rs.20,834/- or above Rs.208 Up to Rs.18,750/- Nil Rs.18,751- Rs.25,000/- 125 Madhya Pradesh Rs.25,001- Rs.33,333/- 167 208(11 months)&212(12thmonth) Rs.33,334/- or above Up to Rs.7,500/- Nil Maharashtra Rs.7,501- Rs.10,000/- Rs.175 Rs.209(11months) & Rs.300(12thmonth) Above Rs.10,001/- Up to Rs.4,250/- Nil Rs.4,251 Rs.6,250/- Rs.100 Manipur Rs.6,251- Rs.8,333/- Rs.167 Rs.8,334- Rs.10,416/- Rs.200 TREY research Rs.10,417/- or above Rs.208 &Rs.212

9 State Per month Income Tax Rate/Amount (per month) Up to Rs.41,66/- Nil Rs.4,167- Rs.6,250/- Rs.16.50 Rs.6,251- Rs.8,333/- Rs.25 Rs.8,334-Rs. 12,500/- Rs.41.50 Rs.12,501- Rs.16,666/- Rs.62.50 Rs.16,667- Rs.20,833/- Rs.83.33 Meghalaya Rs.20,834- Rs.25,000/- Rs.104.16 Rs.25,001- Rs.29,166/- Rs.125 Rs.29,167- Rs.33,333/- Rs.150 Rs.33,334- Rs.37,500 Rs.175 Rs.37,501-Rs.41,666 Rs.200 Above Rs.41,667/- Rs.208 Up to Rs.4,000/- Nil Rs.4,001- Rs.5,000/- Rs.35 Rs.5,001- Rs.7,000/- Rs.75 Nagaland Rs.7,001- Rs.9,000 Rs.110 Rs.9,001- Rs.12,000/- Rs.180 Rs.12,001/- or above Rs.208 Up to Rs.13,304/- Nil Rs.13,305-Rs.25,000/- Rs.125 Odisha TREY research Rs.25,001-or above Rs.200(11 months) & Rs.300(12th month)

10 State Per month Income Tax Rate/Amount (per month) Up to Rs.16,666/- Nil Rs.16,667- Rs.33,333/- Rs.41.66 Rs.33,334- Rs.50,000/- Rs.83.33 Puducherry Rs.50,001- Rs.66,666/- Rs.125 Rs.66,667-Rs. 83,333 Rs.166.67 Rs.83,333 and above Rs.208.33 Above Rs.20,833/- Rs.200 Punjab Up to Rs.20,000/- Nil Sikkim Rs.20,001-Rs.30,000/- Rs.125 Rs.30,001- Rs.40,000/- Rs.150 Above Rs.40,000 Rs.200 Up to Rs.3,500-/- Nil Rs.3,501-Rs.5,000/- 22.5 Rs.5,001- Rs.7,500/- Rs.52.50 Tamil Nadu Rs.7,501-Rs.10,000/- Rs.115 Rs.10,001- Rs.12,500 Rs.171 Above Rs.12,501/- Rs.208 Up to Rs.15,000/- Nil Rs.15,001- Rs.20,000/- Rs.150 Telangana Rs.20,001- or above Rs.200 TREY research

11 State Per month Income Tax Rate/Amount (per month) Up to Rs.5,000/- Nil Rs.5,001-Rs.7,000/- Rs.70 Rs.7,001- Rs.9000/- Rs.120 Tripura Rs.9,001- Rs.12,000/- Rs.140 Rs.12,001- Rs.15,000/- Rs.190 Rs.15,000 or above Rs.2496 Up to Rs.10,000/- Nil Rs.10,001- Rs.15,000/- Rs.110 Rs.15,001-Rs.25,000/- Rs.130 West Bengal Rs.25,001-Rs.40,000/- Rs.150 Rs.40,001 or above Rs.200 TREY research

12 The following is the list of the States and Union Territories where Professional tax is not levied on its people:- 1. Arunachal Pradesh 2. Andaman & Nicobar 3. Chandigarh 4. Dadra & Nagar Haveli 5. Daman & Diu 6. Delhi 7. Haryana 8. Jammu & Kashmir 9. Lakshadweep 10.Rajasthan 11.Uttaranchal 12.Uttar Pradesh TREY research

1) Do those who have to pay profession tax fall in certain categories? Yes, there are certain categories under which those who are liable to pay profession tax fall. These categories include individuals, firms, corporations, Hindu Undivided Families, companies, societies, associations and clubs are liable to pay profession tax. 13 2) What do you mean by registration certificate and enrolment certificate? Employers who are liable to subtract and pay profession tax on their employees behalf, apart from government officers, are given registration certificates. All persons who are mandated to pay this tax, apart from those whose profession tax is paid by their employers, are given enrolment certificates. 3) Where do I make an application for an enrolment certificate and registration certificate? The relevant registration authority must be contacted for enrolment certificate or registration certificate, at Vikrikar Bhavan, Mazgaon, in case you reside in Mumbai, or at the closest district Sales Tax office in case you reside outside Mumbai. 4) Are there any penalties for submitting incorrect information? Under Section 5(6) of the Profession Tax Act, the penalty for providing wrong information when applying for an enrolment certificate or a registration certificate is 3x the actual tax payable. TREY research

5) How do professional employees pay tax? 1. Locate the professional tax website for your state. 2. Fill the professional tax payment form carefully. 3. Verify the information and pay professional tax online. 4. You can also pay this tax at the district sales tax office. 14 6) Who is exempted professional tax? Parents of children with permanent disability or mental disability. Members of the forces as defined in the Army Act, 1950, the Air Force Act, 1950 and the Navy Act, 1957 including members of auxiliary forces or reservists, serving in the state. 7) Can we claim refund of professional tax? Professional tax is paid at the end of month presuming that you have carried out the profession in that month. Therefore once professional tax is paid, there can be no refund. You cannot get your professional tax back. But you can claim deduction of profession tax file filing your salary returns. 8) What is RC no in professional tax? Every employer liable to Professional Tax on behalf of their employees must obtain Employee Registration - Certificate of Registration (RC) with in thirty days of his becoming liable to pay tax. TREY research

15 9) Is partnership firm liable for professional tax? Yes, Private limited Companies, One Person Companies, Partners of Limited Liability Partnerships, Partnership firms, and Sole Proprietors apply for profession tax registration immediately upon incorporation. In case of other classes of individuals, the tax is liable to be paid by the person himself. 10) Is professional tax and TDS same? In this case Income Tax amount deduct when payment made and salary by prescribed Percentage according to income tax. TDS amount is like advanced Tax. Professional tax is collected by state government. You may work in any organization , but practicing your profession you are paying tax to the state government. 11) Why do you have to Pay Professional tax? It is a direct tax Pay to state Gov. for Maintain infrastructure. TREY research

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