Introduction: Professional Tax

The tax we pay is a receipt (revenue) for the Indian government. They put the money towards things like defence, police, the courts, public health, and infrastructure. However, you might be startled to learn that interest payments account for over a quarter of all government spending (23.31 per cent). In general, we may state that tax money is spent to pay the country's recurring and non-recurring expenses. Salary payments to government employees, for example, are examples of recurring expenses.

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Professional Tax is a state-imposed tax that is assessed on the income earned by the trade and remitted by the employer. Every year, a person must pay a professional tax of around Rs.2500 to the state or any local authority in the form of a tax on professions, trades, callings, and employment. Professional tax is not just placed on professionals in India; it is also levied on all employees, business owners, freelancers, and professionals, among others, and it is subject to income surpassing the monetary threshold if one exists. The state government levies a type of tax known as professional tax.

States and Union Territories in Which Professional Tax Is Applicable:-

• Andhra Pradesh
• Assam
• Bihar
• Chhattisgarh
• Gujarat
• Karnataka
• Kerala
• Madhya Pradesh
• Maharashtra
• Manipur
• Meghalaya
• Mizoram
• Orissa
• Pondicherry
• Tamil Nadu
• Tripura
• West Bengal

States and Union Territories Where Professional Tax Is Exempted:-

• Arunachal Pradesh
• Delhi
• Goa
• Haryana
• Himachal Pradesh
• Jammu & Kashmir
• Jharkhand
• Nagaland
• Punjab
• Rajasthan
• Sikkim
• Uttar Pradesh
• Uttaranchal
• Andaman & Nicobar
• Chandigarh
• Daman & Diu
• Dadra & Nagar Haveli
• Lakshadweep

Who Are Eligible For Professional Tax Registration?

Applicability of professional tax: Professional tax applies to all industries and professions in India. It must be paid by every employee of a private company doing business in India. Every business owner is responsible for professional tax registration, as well as the deduction and payment of professional taxes.

Self-employed professionals must pay professional tax if they have a consistent monthly income. Persons who work in certain professions such as banking, media, and so on are referred to as "professionals."

Who Are Not Eligible For Professional Tax Registration?

A few persons are exempt from professional tax restrictions; the exemptions vary depending on which state you live in. The following people are exempt from the professional tax rules:

• Parents of children with mental or physical disabilities.
• Armed forces personnel are those who serve in the armed forces.
• Individuals who have a permanent physical impairment
• The age varies per state.
• Women engaged exclusively as an agent under the directorate of small savings or Mahila Pradhan Kshetriya Bachat Yojana.
• Badli workers who are engaged in the textile industry
• Parents or guardians of mentally handicapped people.

Documents Required For Professional Tax Registration

• Certificate of incorporation, including MOA and AOA/LLP agreement, are the major documents in the registration for professional tax registration.
• PAN Card of the company / Limited Liability Partnership (LLP) attested by the company director or owner of the organization.
• Proof of office location (i.e. - electricity bill) with NOC from the owner of the organization.
• Proof of company bank account with the bank statement and a canceled cheque.
• Passport size photograph, address, and identity proof from all the directors of the organization.
• Board resolution/ statement of consent by the partners
• Shop and establishment certificate of the premises of the organization.
• Salary register and attendance register of the employees.

Process of Professional Tax Registration?

• Step 1: Submitting an online application - The applicant can apply online through the state's CTD (commercial taxes department) portal.
• Step 2: Submitting the Form with the Required Documents - The form, along with the required paperwork, must be submitted by the applicant. (Using Offline Mode to Apply - You can also apply offline by submitting the application form to the respective State Government along with the required documents and money.)
• Step 3: Submit a hard copy of your application - After submitting an application for registration, the applicant must submit a physical copy to the appropriate tax department.
• Step 4: Scrutiny by the Tax Authority - The tax authority will examine an application upon receipt to ensure that it is complete and accurate.
• Step 5: Registration Certificate Issuance - If the authority is satisfied after scrutiny, it will approve the application and present the applicant with a registration certificate. If the department discovers a fault in the application, it is free to raise questions, which will be promptly answered.

What Are the Advantages of Having a Professional Tax registration?

• Minimal Restriction is imposed:- Professional tax is simple to comply with, and professional tax compliance imposes very few constraints.
• Stay Away From Penalties:- Payment of professional taxes is a legal duty, and failure to do so may result in a penalty or punishment. To prevent this penalty and prosecution, self-employed individuals and employers must pay their professional taxes promptly, according to the rates set by their respective states.
• Registering is simple:- Professional tax registration is simple, with annual or monthly compliances.
• Implementing Welfare & Development Programs:- The Professional Tax is a source of revenue for the state governments which helps in implementing schemes for the various welfare and development of the region.
• Get Professional Help easily:- You will never have to deal with all your tax-related issues on your own again. Since you have tax professionals helping you with your tax-related work, you will never be alone again when it comes to your tax woes!
• Can Claim Deduction:- The deduction can be claimed for earlier paid professional tax on salary.

Penalty and Interest for the Late Payment

A penalty of Rs. 5/- per day is imposed for failure to get a Professional Tax Registration Certificate. If you pay your professional tax late or don't pay it at all, you'll be fined 10% of the.