Licencing & Registrations -Professional Tax  Registration

Do you know what is Professional Tax (PT) ?

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Profession tax is the tax levied and collected by the state governments in India. It is a indirect tax. A person earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this professional tax. Different states have different rates and methods of collection. In India, profession tax is imposed every month. However, not all states impose this tax. The states which impose professional tax are Punjab, Uttar Pradesh, Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, Jharkhand and Sikkim . Business owners, working individuals, merchants and people carrying out various occupations come under the purview of this tax.

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Is it Applicable to you ?

 

• Applicability of Profession Tax as per the Constitution of India: Article 276 of the Constitution of India provides that “there shall be levied and collected a tax on professions, trades, callings and employments, in accordance with the provisions of this Act. Every person engaged in any profession, trade, calling or employment and falling under one or the other of the classes mentioned in the second column of the Schedule shall be liable to pay to the State Government tax at the rate mentioned against the class of such persons in the third column of the said Schedule. Provided that entry 23 in the Schedule shall apply only to such classes of persons as may be specified by the State Government by notification from time to time.

What do you require to register with PT ?

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Anybody have exemption from this ?

 

There are exemptions provided for certain individuals to pay Professional Tax under the Professional Tax Rules.

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The following individuals are exempted to pay Professional Tax:

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• Parents of children with permanent disability or mental disability.

• Members of the forces as defined in the Army Act, 1950, the Air Force Act, 1950 and the Navy Act, 1957 including members of auxiliary forces or reservists, serving in the state.

• Badli workers in the textile industry.

• An individual suffering from a permanent physical disability (including blindness).

• Women exclusively engaged as agent under the Manila Pradhan Kshetriya Bachat Yojana or Director of Small Savings.

• Parents or guardians of individuals suffering from mental disability.

• Individuals, above 65 years of age.

 

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Are there any penalties ?

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While the actual amount of penalty or penal interest may depend on the respective State’s legislation, a penalty may be levied by all such states for not registering once professional tax legislation becomes applicable. Further, there are also penalties for not making the payment within due date and also failing to file the return within the specified due date.

For example: In the State of Maharashtra Rs 5/day is imposed as a penalty for delay in registration, Interest @ 1.25% per month of delay in payment, a penalty of 10% of the amount of tax in case of delay/non payment of professional tax, Rs 1000 – Rs 2000 penalty for delay in filing the return

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