Professional Tax

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Professional Tax

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Contents

• What is Professional Tax?
• States Allow Professional Tax in India
• Professional Tax Exemptions
• Who is responsible for deducting Professional
  Tax?
• Professional Tax Registration
• Professional Tax Slab Rates

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What is Professional Tax?

• The state government of India levies
  the professional tax on income from profession or
  employment.
• The professionals earning an income from salary
  or anyone carrying out a profession such as a
  lawyer, Teachers, doctor chartered accountant,
  etc. are required to pay this professional tax.
• The collection methods of is Different for
  different states in India.
• Professional tax is to be paid by every single
  earning individual in India. The tax calculation
  and amount collected may vary from one state to
  another, but it has a limit of Rs. 2500/- per
  year. 

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States Allow Professional Tax in India

• The states which impose the professional tax in
  India listed below. Business owners, merchants
  and people carrying out various occupations come
  under the purview of this tax.
• Andhra Pradesh
• Karnataka
• Madhya Pradesh
• Telangana
• Tripura
• Tamil Nadu
• West Bengal
• Maharashtra
• Chhattisgarh
• Kerala
• Meghalaya
• Odisha, and Sikkim.

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Professional Tax Exemptions in India

• As per the Professional Tax Rules 1975, (Rule 32
  ) the following individuals are exempted to pay
  Professional Tax.
• The parents of children with the permanent
  disability or mental retardation.
• Members of the forces as defined in the Army Act,
  1950 or the Air Force Act, 1950 and the Navy Act,
  1957 including members of auxiliary forces or
  reservists, serving in the state.
• The Badli workers in the textile industry.
• An Individual suffering from a permanent physical
  disability (including blindness).
• Women exclusively engaged as agent under the
  Mahila Pradhan Kshetriya Bachat Yojana or
  Director of Small Savings.
• Parents or guardian of an individual who is
  suffering from mental retardation.
• An Individual, who have completed the age of 65
  years, (with effect from 01/04/1995).
• The Parents or guardians of a child suffering
  from a physical disability as specified in clause
  (C) with effect from 01/10/1996.

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Who is responsible for deducting Professional
Tax?

• The employer is responsible for deducting
  professional tax from the salaries of his
  employees and paying the amount so collected to
  the appropriate State government.
• An Employer has to furnish a return to the tax
  department in the prescribed form within the
  specified time.
• The return (which is filed) should include the
  proof of tax payment. In case the payment proof
  is not enclosed, the return shall be deemed
  incomplete or invalid.

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Professional Tax Registration

• Professional Tax is a state level that applies to
  salaried employees and professionals,
  including lawyers, chartered accountants, and
  doctors. In the Following state in India,
  Profession Tax is applicable in Andhra Pradesh,
  Assam, Chhattisgarh, Tamil Nadu, Karnataka, West
  Bengal, Maharashtra, Gujarat, Kerala, Meghalaya,
  Orissa, Tripura and Madhya Pradesh.
  Profession Tax Registration is mandatory within
  30 days of employing staff in business or, in the
  case of professionals, 30 days from the start of
  the practice. Profession tax needs to be deducted
  from the salary or wages paid the amount varies
  by state and amount.
• Apply for the Registration Certificate to assesse
  states tax department within 30 days of
  employing staff for his business.
• If the assesse has more than one place of work,
  then apply separately to each authority as
  regards the place of work coming under the
  jurisdiction of that authority.

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Documents required for Profession Tax Registration

• A Copy of PAN Card of the Company.
• A Copy of Certificate of Incorporation of
  Memorandum Articles of Association.
• A Copy of List of Directors of the Company.
• A Copy of ID Proof Address proof of the
  directors.
• A Copy of Board of Directors Resolution.
• A Copy of List of Employees (On the letterhead of
  the company).
• An ID Proof Address proof of Authorized
  Signatory.
• A Copy of Leave License agreement of the
  premises.
• A Copy of Leave License agreement of warehouse
  premises.
• A Latest Electricity Bill or Maintenance Bill of
  the premises.
• A Latest Electricity Bill or Maintenance Bill of
  the warehouse premises.
• A Cancelled Cheque (Original).

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Professional Tax Slab Rates in India

• The maximum Professional Tax that can be imposed
  by any State in India is Rs. 2500/-.
• Total amount of professional tax paid during the
  year is allowed as Deduction under the Income Tax
  Act.
• The profession tax is a source of revenue for the
  State Governments which helps the different in
  implementing schemes for the welfare and
  development of the region. Professional Tax is
  deducted by the employers from the salary of the
  salaried employees, and same is deposited with
  the State Government.
• For other individuals, they have to pay directly
  it to the Government or through the Local Bodies
  appointed to do so. Lets check the P Tax Slab
  fro the financial year 2016-17 in the following
  sections.
• For More Click Professional Tax Slabs

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