All salaried employees are subject to professional tax, which state governments enforce. All working professionals, such as CA, lawyers, and doctors, are subject to professional tax. It is assessed based on the person's occupation, trade, or profession. Although the tax rates vary state to state.
Professional tax is imposed on all trades and professions. It is mandatory for every employee of a private sector company operating in India to pay tax. Every business owner pays for professional tax registration, as well as for professional tax deduction and payment.
Is there anyone exempt from paying professional tax?
• A few persons are excluded 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 severe permanent disability.
• Women employed exclusively as agents under the directorate of small savings, or Mahila Pradhan Kshetriya Bachat Yojana.
• Badli workers in the textile sector.
• Parents or guardians of mentally disabled people.
Companies
Firms
Limited Liability Partnerships
Societies
Associations
Clubs
Legal Practitioners
Contractors
Architects
Engineers
Insurance Agents
Tax Consultant, Chartered Accountants, Company Secretaries, Surveyors, Medical Representatives, such as doctors, as well as management professionals
1. Business registration certificate like GST registration Certificate, Company Incorporation Certificate, etc
2. Copy of PAN Card
3. Aadhar Card and PAN Card of Proprietor/Director/Partner
4. Business address proof like rent agreement or electricity bill
5. Copy of cancelled check
6. Passport Size photograph of Proprietor/Director/Partner
Professional tax certifications are divided into two categories:
1. The PTEC (Professional Tax Enrolment Certificate)
This is paid by the company, the owner, or the professional, such as a private or public limited company, a sole proprietor, a director, and so on.
2. The PTRC (Professional Tax Registration Certificate)
The tax is deducted from the employee's earnings and deposited with the government by the government or a non-government employer.
The judiciary in many Indian states has made it mandatory for employers to register for professional tax. They must deduct and pay the taxes of all employees who work under them after registering.
Failure to register as a professional taxpayer leads to significant fines that increase over time.
The tax requirements for professionals are extremely simple to follow. The registration procedures are simple to complete, and the subsequent steps are likewise simple.
On the premise of the professional tax paid, deductions can be made in the salary. The deductions will be permitted in the calendar year in which the payments were paid.
Local governments and state governments can collect all professional taxes based on employment, professional trades, and various other factors. The amount of professional tax collected each year should not exceed Rs. 2500.
Professional tax is determined using salary slabs. There is no tax on the minimum wage. The maximum amount of Professional Tax that can be paid in a year is Rs.2500. The tax brackets differ from one state to the next.
Professional tax is a statutory tax that every individual must pay, and non-compliance can result in fines
Every individual actively or passively engaged in any profession, trade, calling, or employment falls into one of the classes listed in the second column of Schedule I to the profession tax act is subject to the professional tax.
An employer who wants to get a registration certificate must do so within thirty days after being responsible for the tax.
