Professional Tax is a tax levied on professionals in India. PT is state-level tax and to be paid by every member of staff employed in private companies. States covers under this tax are: Karnataka, Bihar, West Bengal, Andhra Pradesh, Gujarat, Assam, Kerala, Meghalaya, Odessa, Tripura, Madhya Pradesh, Sikkim, Telangana, Maharashtra, and Tamil Nadu
What is the Amount of Professional Tax? Professional Tax is levied by the respective State Government Tax. The maximum Professional Tax which may be levied as of Rs 2,500/-. Professional tax is a tax levied by the various State Governments of India on salaried individuals, working in government or non-government entities, or in practice of any profession, including Chartered Accountants, Doctors, Lawyers etc or carry out some form of business. This form of tax is in practice for a long time and States were conferred the power of levelling the Tax under Clause (2) of Article 276. The rate at which Professional tax is charged is based on the Income Slabs set by the respective State Governments. However the maximum Professional Tax that can be levied by any State till date is Rs 2500/-..
The slab for professional tax varies across the different states in India. Click here for the different slab rates.
You need to have a PAN Card Copy for the firm.
If you are a Private Limited Company or a Partnership, you need the PAN Card of the Company or Partnership, respectively.
For Proprietorship, a personal PAN Card is sufficient.
Next, the Memorandum and Articles of Association of the Company or the Partnership Agreement if it is a Partnership.
Rental agreement for the office address, if it is rented.
The Address Proof, Identity Proof and PAN Card of the Directors / Partners / Proprietor. For the Address Proof, an Electricity Bill is sufficient and the for Identity Proof, the Passport / Driving License / Voter ID Card / Aadhar Card will suffice.
Finally, you need the Address Proof of the office address where the business operates, you can use the electricity bill or telephone bill for the office premises.
1. Who is responsible to deduct Professional Tax?
The owner of a business is responsible to deduct professional tax from the salaries of his employees and pay the amount so collected to the appropriate government department.
He has to furnish a return to the tax department in the prescribed form within the specified time.
The return should include the proof of tax payment. In case the payment proof is not enclosed, the return shall be deemed incomplete and invalid
2. What Penalties for Non-Compliance on Professional Tax Payment?
Delay in obtaining Registration Certificate, a penalty of Rs. 5/- per day. In case of non/late payment of profession tax, penalty will be 10% of the amount of tax. In case of late filing of returns, a penalty of Rs. 1000 per return will be imposed if you filed after due date in 1 month. After 1 month, penalty should be Rs. 2000 will be imposed (from 01/04/2015) (Maharashtra: Profession Tax Act 1975).