Professional Tax

Overview

Professional tax is the tax levied by the state governments in India by anyone earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. They are required to pay this professional tax. However, different states have different rates and methods of collection.

The owner of a business is responsible for deducting professional tax from the salaries of his employees and pays the amount so collected to the appropriate government department.

The professional tax is a slab-amount based on the gross income of the professional. It is deducted from his income every month. This tax is levied based on slab rates depending on the income of the individual. While on one hand income tax is collected by central government, Professional tax is collected by state government. However Professional tax is not levied in Delhi.

One needs to file for Professional tax return properly on or before the due date. Also if you own a trademark which you want to register then we can also provide with services of trademark registration.

Small Companies- Companies however small their turnover is, needs to manage accounts which can be a tedious job, so companies with small budget who cannot afford a full time accountant must opt for virtual accountants as the same work can be done at a very low cost without employing a full time accountant.

Big Companies- Companies with an already existing accounting department can go for virtual accounting for all extra assistance as the virtual accounting professionals can easily integrate with the existing system. This would save them from any further accounting related issues in future.

The biggest highlight of ‘virtual accounting’ is that it allows the businessmen to focus on their business goals and leave all accounting related headaches on the virtual accounting professionals.

Documents


Documents required for Professional Tax Registration

  • Online Application Form (Professional tax form)
  • Memorandum of Association & Article of Association
  • Residence address proof along with ownership details
  • Address proof of business location (Ownership details)
  • Two photographs of the directors


Process


Procedure for Registration of Professional Tax

  • Visit the web-site of the Sales Tax Department of the respective state.
  • Now the person needs to go to the PT registration link (e-registration link)
  • After this, TAN number needs to be mentioned
  • Then one needs to fill form 1 and form 2 for registration certificate and enrollment certificate respectively
  • Getting the acknowledgement for the submission of certificate


FAQs :


1. What is the meaning of Professional Tax?

Professional Tax is a tax which is levied at the state level in our country. People in professions like of a CA, Lawyer, CS, Doctor or a business person/Merchant and earn through such professions are liable to pay professional tax in some states of the country.


2. Who are liable to pay professional tax?

In case of Salaried and Wage earners, the Professional Tax is liable to be deducted by the Employer from the Salary/Wages and the Employer is liable to deposit the same with the state government. In case of other class of Individuals, this tax is liable to be paid by the person himself.


3. Why do we pay professional tax?

It is a source of revenue for the government. The maximum amount payable per year is INR 2,500 and in line with tax payer's salary, there are predetermined slabs. It is mandatory to pay professional tax. The tax payer is eligible for income tax deduction for this payment.


4. Is professional tax is refundable?

Professional tax is deducted and paid by your employer. Hence, possibility of getting it back is remote. You can only go ahead and claim professional tax as a deduction from your salary under Section 16 of income tax act. Therefore once professional tax is paid, there can be no refund.