WHAT IS PROFESSIONAL TAX?

 Professional Tax Registration is a tax

imposed by the State government.
Professional tax is imposed on income earned
in any trade or profession and is usually paid
by the employer. The total professional tax
payable with reference to any one person to
the State or to any local authority in the State
by way of taxes imposed on professions,
trades, callings and employments should not
exceed rupees two hundred fifty and two
thousand five hundred rupees per annum.
 It is a type of tax imposed on all professions, trades and employment
and levied based on the income of such profession, trade and
employment. It is imposed on employees, a person carrying on
business including freelancers, professional etc. subject to income
exceeding the monetary threshold. State government are entitle to
make laws with respect to professional tax though being tax on
income under Article 276 of the constitution of India which deals with
tax on professions, trades, callings and employment. Professional tax
is a deductible amount for the purpose of Income-tax Act, 1961 and
can be deducted from taxable income.

Professional tax is collected by the Commercial Tax Department. The

commercial tax department of the respective states collects it which
eventually reaches the fund of Municipality Corporation. The
professional tax is a source of revenue for the State Government
which helps the state govt. in implementing schemes for the welfare
and development of their respective region.
WHO ARE RESPONSIBLE TO PAY
PROFESSIONAL TAX?


In case of employees, an employer is responsible to

deduct and pay professional tax to the State
Government on behalf of his employees subject to
the monetary threshold if any provided by
respective state’s regulations, employer (corporate,
partnership firms, sole proprietorship etc.) also
being a person carrying on trade or profession is
also required to pay professional tax registration on
his trade or profession again subject to the
monetary threshold if any provided by respective
State’s regulations.
PROFESSIONAL TAX RATE
 The maximum amount due per annum towards
professional tax is INR 2,500. The professional
paid tax registration is charged based on income
slabs rate on the gross income of the
professional. It is to be deducted from his income
every month. In case of Salaried and Wage-
earners, the Professional Tax is liable to be
deducted by the Employer at the time of payment
from the Salary or Wages, and the Employer is
liable to deposit the same with the state
government. In case of other class of Individuals,
the very person is liable to be pay it himself.
WHAT IS PROFESSIONAL TAX
CERTIFICATE?
 There are two types Professional tax certificates available:
 PTEC (Professional Tax Enrollment Certificate):
 This is paid by the business organizations, owner or
professionals i.e. Private Limited Company or Public Limited
Company, Sole Proprietor, Director Etc.
 PTRC: (Professional Tax Registration Certificate):
 Government or Non- Government employers who Deduct the tax
from the employee’s wages and deposit the same to the
government.

Professional tax is applicable once the person starts his

profession or business within 30 days of starting the profession.
In case the company has its business in more than one places,
then it is required to take registration for each such place.
WHAT IS THE APPLICABILITY OF
PROFESSION TAX?
 Company, Firms and LLP:
 Company, firms, LLP, Corporation, societies, HUF,
Associations and clubs are taxable entity.
 Professionals(Individuals):
 Legal Practitioners like management consultants,
tax consultants, surveyors, CS, CA, Insurance
agents, engineers and other professionals like
solicitors, Notaries, medical representatives like
dentist, medical consultants, doctors, architects
and contractors are all considered as professional
individuals who is liable to pay professional tax.
DOCUMENTS REQUIRED FOR
PROFESSIONAL TAX REGISTRATION
 Acknowledgement of the online form, also the
hard copy of the e-form submitted
 PAN Card of the applicant
 Address proof of Partner, Director, and

Proprietor
 Certificate of Incorporation of an organization
 Address proof of registered place of business
 Blank Cancelled Cheque with organizations name

preprinted on it
 Establishment Certificate
 PAN& PTEC details of the applicant
PROFESSIONAL TAX REGISTRATION
PROCESS
 The professional tax registration process varies state to state, the tax slab rates can vary
from one state to another. If the business owner has employees under different states,
then one has to get a professional tax registration for all the states.

The number of returns which one needs to file will depend on the state the person have
his work place in. before filing a return it’s important to know the rules and regulations of
the respective states.

You can get registered as a payee of professional tax in a local professional tax office at
that specified state.

It is essential for all the individuals and businesses that are liable for the tax payment.

Calculate the amount need to pay for professional tax in the prescription form. The
payment and calculations done should be audited by the chartered Accountant.

In case of employment, the employer has to deduct the professional tax from the salary of
employees at the time of payment made to employees.

Once the person gets registered under professional tax, then he is liable to pay
Professional Tax within the given time; different professions are specified with different
PT rates.
RESPONSIBLE PERSON FOR
DEDUCTING PROFESSIONAL TAX
 An employer is responsible for deducting the
professional tax from the salaries of his
employees and deposit the collected amount
to the local government authorities, also he
need to file a return to the respective
department in a prescribed form with proof
of tax payment within certain period of time.

Employer (Corporate, sole Proprietorship,

Private Limited) is also liable to pay the tax
imposed on his trade or business.