Online Professional Tax Registration

Any person who earns income in the form of a salary is required to pay a certain percentage of such income to the State Government. This charge is created in the form of a tax known as professional tax, which is distinct from the income tax payable to the Central Government. Although there are differences in procedure and applicability ranging across Indian states, certain common features characterize professional tax in India.

Professional Tax- Meaning

Professional tax is a form of state-level taxation that is levied on all working professionals as well as employees on the grounds of the nature of their professional engagement, business, or employment. 

Features of Professional Tax:

  • Professional tax is levied across fields of employment, including professional services, businesses, self-employment, and the like. Professional tax is not merely restricted to professional arenas of work but is far-reaching.
  • Professional tax is a State levied tax. This means that the procedures related to professional tax and its collection are framed and carried out by State Governments. This is why it may vary across different States in India.
  • Professional tax is subject to deduction from the income tax paid by a worker, employee, or self-employed person, as the case may be.
  • The maximum amount of professional tax charged in a year has been limited to two thousand and five hundred rupees only.

Professional tax registration online

In order to pay professional tax, it is essential to undergo the process of registration. In cases of businesses engaged in employing persons and their employees thereof, the process of professional tax registration and payment is carried out by the private firm or business in question. Alternatively, in cases of freelancing or self-employment, professional tax is registered for and paid by the individual independently. 

Persons Exempted from Professional Tax:

Certain persons are exempted from the process of professional tax registration and payment. The qualifiers for such exemption are determined by state governments and are variable. Certain qualifiers are as follows:

  • Members and persons engaged in service in the Armed Forces.
  • Persons are operating educational institutions till the higher secondary level.
  • Persons with permanent physical disabilities such as blindness, deafness, etc.
  • Persons with disabilities of 40% category and above. 
  • Foreign nationals who are employed as technicians within India.

Documents for Professional tax registration online:

Businesses need to furnish the following documents for registration:

  • Identity proof such as Aadhaar card or passport along with PAN card of each of the directors of the business.
  • Proof of Residence of directors.
  • Address Proof of the business or organization along with proof of ownership or allowance of premises such as sale deed or rent agreement.
  • Certificate of Incorporation or any document of a similar effect.
  • Details of employees engaged in services.
  • Company documents such as Articles of Association and Memorandum of Association.
  • Certificate of Establishment.
  • Canceled Blank Cheque with Bank details of the official business account.
  • Financial Statements such as the Account Statement.

The simplified steps for online registration are as follows:

The process of Professional tax registration varies depending on the state that the registration is being carried out. The registration must be carried out for companies with multi-state employees across all states.

However, certain procedures that companies need to comply with are as follows:

  • The registration needs to be completed within 30 days of employing a new professional or worker. Any delay beyond that time period attracts a penalty of five rupees per day.
  • In the event of non-payment, the payee is penalized with a charge of 10% of the amount payable.
  • The amount payable is determined on the basis of the income slab of the employee, and the rate is determined according to the rules of the concerned state (s).
  • The application for registration is submitted separately to the authorities of each concerned state by filling up the professional tax registration form, wherever applicable.
  • The registration acknowledgment and hard copy are provided to the applicant within 7-15 days. It depends on the viability of the concerned state.
  • Some states provide complete exemption from professional tax, while others have distinct procedures for its payment. 

Professional Tax Registration Certificate:

The issuance of the professional tax registration certificate may be one of two types, determined by the nature of engagement or business. The Professional Tax Enrollment Certificate (PTEC) is payable directly by the business owner or employer or the self-employed person, as the case may be. Alternatively, the Professional Tax Registration Certificate is payable by the employer or employing entity on behalf of their worker or employee.

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