Professional Tax Registration

Professional Tax Registration is mandatorily imposed in various states of India which has found its root from supreme law of India i.e. the Constitution of India under the provisions of Article 276. It obliges the practicing professionals such as CAs (Chartered Accountants), lawyers and doctors to pay p tax registration to the government. Further, the business owners are also obliged to deduct the professional tax from the salaries of their employees and pay this amount to the respective state government department.

 

Professional tax Registration is not valid for all states as collection of professional tax (p tax) is a discretion of state governments. This is the reason every state has its different act, rules, regulations, online portals and fees. It depends upon the income slabs determined by the respective state governments. The professional tax registration return needs to be filed annually by all the registered employers and can be claimed to be deducted under the Income Tax Act, 1961

Who Should Registered Under Professional Tax Registration?

  • Individual Professionals
  • Any of the following Organizations:
    1. Firms
    2. Limited Liability Partnership (LLP)
    3. Company
    4. Corporations
    5. Business of Hindu-Undivided Family
    6. Registered Societies
    7. Associations
    8. Clubs
  • Partners and directors of above-mentioned organizations
  • Employers

List of States and Union Territories (UTs) Imposing/ Not Imposing Professional Tax Registration

States/ UTs imposing PT

Gujarat

Karnataka

Kerala

Maharashtra

Manipur

Meghalaya

Orissa

Puducherry

Tamil Nadu

West Bengal

Jharkhand

Andhra Pradesh

Bihar

Chhattisgarh

Madhya Pradesh

Mizoram

Tripura

Assam

Sikkim

Telangana

 

 

States/ UTs not imposing PT

Arunachal Pradesh

Delhi

Goa

Haryana

Himachal Pradesh

Jammu & Kashmir

Nagaland

Punjab

Rajasthan

Lakshadweep

Uttar Pradesh

Uttaranchal

Andaman & Nicobar

Chandigarh

Daman & Diu

Dadra & Nagar Haveli

 

 

Time Limit to File Professional Tax

Professional Tax registration applications must be submitted to the relevant State’s tax department within 30 days of employing staff. In cases where there is more than one place of work, there must be made a separate application for each of those premises according to their jurisdiction.

Penalty in Case of Non-Compliance

The penalty varies from state to state for non-compliance. In Maharashtra, for each delayed day in obtaining a Professional Tax registration, there is a penalty levied of Rs. 5. The penalty is 10% of the amount of tax for cases involving non-payment or late payment of Professional Tax Registration (p tax).

Video on Professional Tax Registration

  • Professional Tax Registration Explanation
  • Who Should Registered Under Professional Tax Registration
  • Time Limit to File Professional Tax
  • Who are exempted to pay Professional Tax?
  • State specific Profession Tax Rates

Professional tax is a right of state government and the local municipal authorities which is collected on the basis of business, employment or trade. It has its origin in Constitution of India which sets a maximum limit of professional tax which cannot exceed Rs. 2,500/-.

Every trader and self-employed professional is required to apply for Professional Tax Registration Certificate (PTRC) and Professional Tax Enrollment Certificate (PTEC) in his/ her State of business. Generally, PTRC is important for entities who hires employees and pay them salary or wages while PTEC is important for traders and self-employed individuals to pay the company’s and director’s professional tax.

Subject to provision enshrined under article 276(2) of the Indian Constitution, a state cannot impose more than Rs 2,500 of professional Tax on a person in a given financial year.

An employer is liable to pay Profession Tax under the provisions of the applicable Profession Tax Act.

According to Section 16(iii) of the Income Tax Act, 1961, profession tax paid by an employee is allowed as a deduction from their gross salaried income.

These are the following exempted individuals:

  1. Badli workers (Textile Industry)
  2. Parents/ Guardians of Children suffering with any mental or permanent physical disability.
  3. Persons with more than 65 years of age
  4. Women exclusively earning as an agent of Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings.
  5. Defined members under following forces serving in the state:

1. Army Act, 1950

2. Air Force Act, 1950

3. Navy Act, 1957

4. Members of auxiliary forces

5. Members of reservists

 

Note: These are general exemption criteria but there are several other exemptions depending upon the concerned State professional tax acts, their rules and regulations.

What’s Included

  • Filing of Registration Application
  • Professional Tax Enrolment Certificate

Documents Required

  • Self-attested copies of PAN
  • Address proof of business which may include latest utility bills, ownership document or NOC from the owner of premises
  • Financial statement of the business
  • Salary details of employees
  • Two Photographs of the Authorized Signatory
  • Cancelled cheque of the current account of the business
In case the applicant is a Partnership firm/ LLP/ Company:
  • Certificate of Incorporation/ LLP Agreement/ Registration Certificate
  • Memorandum and Articles of Association
  • Board resolution/ Statement of consent from partners
  • Self-attested copies of address and photo ID of partners/ proprietors/ directors

Professional Tax Registration


Professional tax is the tax levied and collected by the state governments in India. Filecrat team can help you with professional tax registration.

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