Professional Tax - Biz Setup Global

Everything about Professional Tax

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At BizSetupGlobal, we provide comprehensive accounting and compliance services designed to empower firms like yours to thrive and succeed.

Must Know Facts about Professional Tax

State governments charge all salaried workers professional tax. Lawyers, doctors, and chartered accountants pay professional taxes. It is calculated by occupation. State tax rates vary, but the maximum professional tax is ₹2,500 annually.

Eligiblity for Professional Tax

Professional tax is levied on all types of trades and professions in India. All private firm employees in India must pay it. Business owners are responsible for professional tax registration, deduction, and payment.

Professionals with monthly incomes must pay the professional tax. Professionals work in fields like accountancy, media, etc.

Who is exempted from paying professional tax?

The professional tax rules provide exemptions for a few individuals; the exemptions differ based on the state you belong to. The professional tax rules provide exemptions to the following individuals:

Parents of children suffering from mental or permanent disability.
Members of the armed forces.
Individuals with a permanent physical disability.
The age differs state-wise.
Badli workers engaged in the textile industry.
Women engaged exclusively as an agent under the directorate of small savings or Mahila Pradhan Kshetriya Bachat Yojana.
Guardians or parents of mentally challenged individuals.

Benefits of Professional Tax Registration

Judicial requirement

The judiciary strictly binds employers in many states of India to obtain the registration of professional tax. After the registration, they have to make the deductions and pay the service taxes of all the employees who work under them.

Avoid paying penalties

Failure to professional tax registration results in huge penalties that increase over time. Easy to comply: The professional tax regulations are so easy to follow. The registration procedures can be done quickly, and further proceedings are much more accessible.

Deductions

Deductions can be claimed in the salary based on the professional tax paid. The deductions will be allowed in the year corresponding to which the taxpayer made the payments.

State government tax

The local and state governments have the right to collect all the professional taxes based on employment, professional trades and much more. The accumulated amount of professional tax per annum should not go beyond ₹2500 per annum.

Documents Required for Professional Tax Registration

Certificate of incorporation, including MOA and AOA/LLP agreement.
PAN card of company/LLP attested by the company director.
Proof of office location with NOC from the owner of the premises.
Verification of company bank account with the bank statement and a cancelled cheque.
Passport size photograph, address and identity proof from all the directors.
Board resolution/ statement of consent by the partners.
Shop and establishment certificate.
Salary register and attendance register.

Professional Tax Registration Applicability

Firms/Companies/LLPs

Firms, LLPs, corporations, societies, HUFs, associations, clubs, and companies are taxable entities under professional tax. Under the professional tax, all branches involved will be treated as separate individuals.

Individuals (Professionals)

Medical representatives such as dentists, medical consultants, doctors, management consultants, tax consultants, surveyors, company secretaries, chartered accountants, insurance agents, engineers, architects, and contractors are all considered professional individuals who must pay professional taxes.

Partners and Directors

Professional tax must be paid by those who act as company directors, firm partners, LLP partners, and designated partners. They must register with the Professional Tax Act within 30 days of being appointed to these positions.

Employers

Within 30 days of the company's incorporation, the company/firm must get a professional tax enrollment certificate (PTEC) by registering on the government portal. The company/firm must have a professional tax registration certificate (PTRC) within 30 days of employing a staff member. Employers are supposed to deduct professional tax from the salary of the people employed under them and submit it to the professional tax department when filing returns. Employers are supposed to deduct professional tax from the salary of the people employed under them and submit it to the professional tax department when filing returns. The employer must register at the professional tax department before 30 days of its applicability.

Consequences of Professional Tax Violation

Though the actual penal interest or penalty can change according to each state’s legislation board, all states will be penalised if they have not registered after the professional tax legislation is made applicable.
Also, penalties will be charged if the payments are not made within the due date or if the return is not filed within the specified date.

Online Registration Process

Select the package that suits you.

a. list of services purchased
b. documents to be submitted or next action.

Make a payment, and you will receive your personalised dashboard login and password.

Once documentation is complete, you will be informed about the next steps through email and sms, and you can also check the current status of your request in your personalised dashboard.

If you have any questions, you can use the Helpdesk system on your dashboard to ask us, and we’ll be pleased to call you if needed.

Our Compliance Manager will check your submitted documents and contact you for any inconsistencies.

Our team will provide the necessary information at each step to ensure a seamless experience.

Key Registration Services: Tailored to Your Needs

Each Pvt Ltd has different functions and operations. Thus, registrations are needed.

MSME Registration

MSME or Udyog Aadhaar registration is to be obtained in the business’s name to establish that Pvt Ltd is registered with the Ministry of Micro, Small and Medium Enterprises.

Import Export Code

Import Export Code or IE code is obtained from the DGFT in case the Pvt Ltd business does export /import from India.

TAN Registration

TAN registration must be obtained for Pvt Ltd from the income tax department if the partnership firm is required to deduct any TDS while making any payments as per Income Tax Act 1961.

FSSAI Registration

In case Pvt Ltd is involved in the selling of food products or handling of food products, FSSAI registration must be obtained from the Food Safety and Standard Authority of India in the name of the Pvt Ltd firm.

GST Registration

GST registration must be obtained if Pvt Ltd sells goods or services that cross the GST turnover threshold limit for registration. In most states, GST registration is required for service providers having annual revenue of more than Rs 20 lakhs and in the case of traders-annual revenue of more than Rs. 40 lakhs.

Current Account

A current account can be opened for Pvt Ltd in any bank in India. We offer exclusive partnerships through which zero-balance current accounts can be opened.

Shop & Establishment License

We will register for Shop & Establishment license if needed as per the criteria.

Applicable Taxes and Annual Compliance

Statutory Auditor Appointment

Within 30 days of incorporation.

Annual Return

Companies registered in India must file MCA annual returns annually in forms AOC-4 and MGT-7 by 31st October.

Commencement of Business

The capital mentioned in the MOA [Memorandum of Association] must be deposited in a bank, and a commencement certificate must be obtained from MCA within 180 days of Incorporation.

DIN KYC

The DIN KYC procedure must be completed each year by the company’s directors by 30th April.

Income Tax Filing

Companies registered in India must file income tax returns each year in Form ITR-6 by 30th September.