in our overview
State governments impose professions and trade taxes. Professionals who provide professional services, such as doctors, chartered accountants, lawyers, etc., are not exempt from the professional tax. e individuals earning through any legitimate source of income. The tax must also be paid by all business owners. It is the duty of the proprietor of the business to deduct professional tax from its employees and pay the desired amount to the appropriate State Government’s Professional taxation department. Please note that not all state governments levy this professional tax.
In accordance with Section 16 of the Income Tax Act, 1961, a deduction is allowed for Profession Tax paid to the State Government.
PT is a tax imposed by a state government, which is levied on income earned in any profession. PT is normally paid by employers. The state government collects this tax on all private establishments. Employers are responsible for deducting PT from employees’ salaries, which are deposited into the appropriate state department.
Gross income determines an employee’s PT. Their gross income determines the amount deducted from their salary on a monthly basis. If the person is not a salaried employee but any other class of employee, he has to pay PT himself rather than the employer deducting from his paycheck.
Who pays the professional tax?
The professions or employment tax is a tax levied at the state level. Individuals and organizations are subject to professional tax (Corporations, Partnerships, Hindu Undivided Families, Societies, etc.).
Profession tax registration types
Each individual, professional, or company doing any business or profession is required to register with the Profession Tax Authority. Once a person obtains this certificate, they are liable to online professional tax registration
The employer organization must take a professional tax number (PTRC) on behalf of its employees. Under the PTRC, the company can deduct professional taxes from an employee’s salary and pay the same to the government.
What Are The Requirements For Professional Tax Registration?
1. To obtain a professional tax registration, follow these steps:
2. Excessive turnover by an employer
3. Companies engaged in trades or professions
4. Owner of a business with employees in different states
5. Freelancers
How to Register for Professional Taxes Online
- In most cases, we can assist you in getting professional tax registration within five to ten working days.
- Preparation of Applications: Your business will be assessed by our tax experts
- An experienced tax expert files the professional tax application within two working days with the state’s relevant department.
- The application will be completed after the screening. Registration will be granted if all is well.
- Deadlines for Professional Taxes
- For employers with more than 20 employees, the payment must be made within 15 days of the end of the month. If an employer has fewer than 20 employees, he must pay quarterly (i.e. by the end of the next month).
A professional tax registration requires the following documents
- Proprietor/director/partner’s proof of address (latest Electricity Bill, Aadhar, Pan Card, and Voter Id)
- Photo of passport size
- In the case of a partnership, the partnership deed is required
- A copy of the VAT RC
Professional tax registration benefits
- Don’t go it alone with the IRS.
- You should reduce your overall balance
- Protect your home and other property.
- Don’t let your bank account be charged.
- Take steps to avoid IRS wage garnishment.
- We are getting rid of outstanding tax debt for much less.
- Review past returns.
Frequently Asked Questions
Who are the types of professional taxpayers?
Professional Tax Payers: (a) Profession Tax Enrolment Certificate (PTEC): People who engage in Profession, Trade, or Callings and fall under one of the clauses set forth in Schedule I shall obtain a PTEC. (b) The Profession Tax Registration Certificate (PTRC) must be obtained by any employer who employs even a single employee whose salary exceeds the limits for claiming deductions from salary.
How long does the Professional Registration Certificate last?
Unless the certificate is canceled, the registration number remains permanent.
How much tax can a state levy on a professional?
State professional taxes can be deducted from your salary up to a limit of Rs. 2,500.
Professional Taxes are applicable in which states?
There is a professional tax in the following states:
Punjab, Bihar, Karnataka, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Sikkim, Kerala, Meghalaya, Orissa, Tripura, and Madhya Pradesh.
How much Professional Tax must be paid?
The maximum amount of professional tax per year is $2,000. Professionals are generally required to pay a slab of tax based on their gross income. This tax is deducted from the employee’s paycheck every month.
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