Professional Tax Returns & Compliance Filing
Professional tax is just like Income Tax except for the fact that Income Tax is collected by the Central Government and Professional Tax is collected by the State Government. When this tax was first introduced in India, the maximum limit on the tax to be collected was Rs. 250.
Some of the State Governments have represented that the earlier celling of two hundred and fifty rupees which was fixed in 1949, needs to be revised upwards taking into consideration the price rise and other factors. It is also pointed out that the profession tax has, at present, become almost regressive because of the ceiling since even people with high salaries have to pay this tax at only the maximum amount of two hundred and fifty rupees per annum. The upward revision of profession tax has helped the State Governments in raising additional resources.
It usually takes 2 to 3 working days.
- Preparation of Salary/Wages Register
- Bulk PAN Verification
- Challan Verification
- Online Challan Generation and Submission
- Filing of Professional Tax Returns
- Purchase of plan
- FIll in the details in the template provided
- Upload documents on vault
- Return form prepared by Tax Expert
- Filed by Our Experts
- Salary Details of Employees/Labours
- Details of Employer
- Details of responsible person
- Challan details
Professional Tax is Applicable in which States?
Professional Tax Applicable in States
Professional Tax Not Applicable in States
What is Professional tax and who levies it?
What is Professional tax and who levies it?
The nomenclature ‘Professional tax’ could be one of those terms which do not completely convey the real meaning of the term. Unlike the name suggests, it is just not the tax levied only on professionals. It is a tax on all kinds of professions, trades, and employment and levied based on the income of such profession, trade and employment. It is levied on employees, a person carrying on business including freelancers, professionals, etc., subject to income exceeding the monetary threshold if any.
As per Article 246 of the Constitution of India, only Parliament has the exclusive power to make laws with respect to the Union List which includes taxes on income. The state has the power to make laws only with respect to the Concurrent and State list.
However, professional tax though is a kind of tax on income levied by State Government (not all states in the country chose to levy professional tax). The State Government is also empowered to make laws with respect to professional tax though being a tax on income under Article 276 of the Constitution of India which deals with tax on professions, trades, callings and employment.
It may be noted that professional tax is a deductible amount for the purpose of Income-tax Act, 1961 and can be deducted from taxable income.
Professional Tax Rate for Different States
Professional Tax Rate for Different States
Professional Tax or Profession Tax is levied by the State Government on the income of the assessee. Under Article 276 of the Indian Constitution, the state governments are empowered to decide the rate for the professional tax in the state. The maximum amount that can be charged under this tax regime is Rs. 2500. In a few states, this tax is even levied on the basis of source of income.
| Maharashtra | |
| For Men | Nil up to Rs. 7500 |
| From Rs. 7500 – Rs. 10000 | Rs. 175 |
| For Women | Nil up to Rs. 10000 |
| For all Above Rs. 10000 | Rs. 200 and Rs. 300 for the month of February |
| West Bengal | |
| Up to Rs. 8500 | Nil |
| From Rs. 8501 – Rs. 10000 | Rs. 90 |
| From Rs. 10001 – Rs. 15000 | Rs. 110 |
| From Rs. 15001 – Rs. 25000 | Rs. 130 |
| From Rs. 25001 – Rs. 40000 | Rs. 150 |
| Over and Above Rs. 40000 | Rs. 200 |
| Andhra Pradesh | |
| Up to Rs. 15000 | Nil |
| From Rs. 15001 – Rs. 20000 | Rs. 150 |
| Above Rs. 20000 | Rs. 200 |
| Tamil Nadu | |
| Up to Rs. 21000 | Nil |
| From Rs. 21001 – Rs. 30000 | Rs. 100 |
| From 30001 – Rs. 45000 | Rs. 235 |
| From Rs. 40001 – Rs. 60000 | Rs. 510 |
| From Rs. 60001 – Rs. 75000 | Rs. 760 |
| From Rs. 75001 and above | Rs. 1095 |
Similarly, there are different slabs and rates for the other states as well. For the month of February, the Professional Tax is a little higher than the rest of the eleven months in the year.
Who is responsible to collect and pay professional tax?
Who is responsible to collect and pay professional tax?
Professional tax is collected by the Commercial Tax Department. The commercial tax department of the respective states collect it which ultimately reaches the fund of municipality corporation.
Persons responsible to pay professional tax
- In case of employees, an employer is a person responsible to deduct and pay professional tax to the State Government subject to the monetary threshold if any provided by respective State’s legislation.
- An employer (corporates, partnership firms, sole proprietorship, etc.) also being a person carrying on trade/profession is also required to pay professional tax on his trade/profession again subject to the monetary threshold if any provided by respective State’s legislation.
- In such a case, the employer needs to register and obtain both a professional tax registration certificate to be able to pay professional tax on his trade/profession and professional tax enrolment certificate to be able to deduct the tax from his employees and pay. Further, separate registration may be required for each office depending on the respective State’s legislation.
- Persons who are carrying on freelancing business without any employees are also required to register themselves subject to the monetary threshold if any, provided by the respective State’s legislation.
However, a professional tax levy is subject to the exemption provided by the respective State to certain categories. For example, parents or guardian of any person who is suffering from mental retardation, blind persons are exempted among others from levy of Karnataka Professional tax.
What is the procedure to pay professional tax? Is any return to be filed?
What is the procedure to pay professional tax? Is any return to be filed?
This is again a State-specific query. However, in general, a professional tax may be paid either online/offline. Further, depending on the State’s requirement, professional tax returns also need to be filed at specified intervals.
Consequences of violation of professional tax regulation
Consequences of violation of professional tax regulation
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 the 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
