Everything about Professional Tax
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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
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
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 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 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.
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 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.
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.
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.
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.
Financial Statement Preparation
Entire process will take 2 to 3 weeks (Approx)
Getting started is as easy as 1-2-3:
Simply fill out the form to get started.
Make a secure payment. No additional compliance in most cases
Our expert will connect with you & advise on documents.
Frequently Asked Questions
Your Queries, Our Answers
The central government collects income tax directly from all taxpayers. It is based on a percentage of their income. On the other hand, professional tax is an indirect tax levied by the state government. It is assessed on a sliding scale for those engaged in business, occupation, or employment.
Each Indian state has its own professional tax slab. For example, If your monthly income in Maharashtra is between ₹7,500 and ₹10,000, the professional tax is 175. Similarly, for monthly incomes above ₹10,000, the tax is ₹200 for the first 11 months and ₹300 for the last month. Finally, no professional tax is imposed when the monthly salary is less than ₹7500.
Some states require employers to deduct and deposit taxes from employees whose pay exceeds the minimum slab limit. That entity must obtain both a registration and an enrollment certificate.
Download the payment acknowledgement receipt once the payment has been made. The receipt confirms that the payment was successful.
A professional tax registration certificate can be obtained directly from the state's official website. However, for the first time, it is recommended that you seek professional assistance.
Each person who registers for a professional tax certificate will receive a certificate with the TIN as the enrollment or registration number.
The professional tax appears at the top of the salary slip because it is deducted before income tax is calculated. It is deducted from the employee's salary and deposited with the state government. Professional tax is calculated on earned gross income based on the tax levied by the respective state governments.
Professional tax is a mandatory tax paid by every individual, firm, and company. There are penalties in case of non-compliance.
Because professional tax is deducted before income tax is calculated, it appears at the top of the salary slip. It is taken from the employee's paycheck and deposited with the state government. Professional income tax is calculated based on the tax levied by the respective state governments.
When new employees are hired, employers must obtain registration. This allows the employee to deduct the professional tax from their salary. Registration should be accepted within 30 days of hiring new employees.