Karnataka Professional Tax Registration
Karnataka Professional Tax Registration : Profession tax is levied under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976.
Profession Tax shall be paid by every person exercising any Profession or calling or is engaged in any trade or holds any appointment, public or private as specified in the Schedule to the Act.
No Professional Tax is payable by persons who have attained age of sixty-five years. Also, no tax is payable for holding any Profession for less than 120 days in that year.
Professional Tax registration applies to Employer paying salary/wages to employees and Professional Tax on business carried on by the legal entity.
Table of Contents
Who must Pay Professional Tax?
Employers Professional Tax
A person is defined under the Act to mean, any person who is engaged in any Profession, trade, callings, or employment in the State of Karnataka and includes:
• Sole Proprietorship
• Hindu undivided family (HUF)
• Partnership Firm / Limited Liability Partnership
• Limited Company (Public or Private)
• Corporations and Other Corporate bodies
• Any Society
• Any Club or Association.
Every branch of a firm, company, corporation or other corporate body, any society, club, or association is treated as separate person for the purpose of tax liability.
Employee Professional Tax
Salary or wage earners whose salary or wage for a month is not less than Rs.15,000/- [check current rates], the employer is liable to deduct Profession Tax payable under this Act.
It is the responsibility of the employer to deduct tax and pay on behalf of all such employees within 20 days of expiry of the month.
“Salary” or “Wages” includes pay or wages, dearness allowance, arrears of salary, bonus, perquisites, and profits in lieu of salary etc. If arrears of salary or bonus is paid in kind, value of such kinds shall also include in the “Salary” or “Wages”.
Registrations under Professional Tax Act
Karnataka Professional Tax Registration: Profession Tax is levied under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 197. profession tax shall be paid by every person exercising any profession or is engaged in any trade or holds any appointment, public or private. Every entity must ensure following mandatory compliances
Certificate of Enrolment (EC)
Every person liable to pay tax under Professional Tax Act (other than a person earning salary or wages, in respect of whom the tax is payable by his employer), shall obtain a certificate of enrolment from the assessing authority.
The tax should be paid even if there are no employees.
Every employer or person required to obtain certificate of registration within 30 days from the date of commencement of profession, trade, calling or employment.
Certificate of Registration (RC)
The profession tax is payable by any person earning a salary or wage more than Rs. 15,000.00 per month and it shall be deducted by his employer from the salary or wage payable to such person and such employer shall, irrespective of whether such deduction has been made or not is liable to pay tax on behalf of all such persons.
Every employer (except an officer of Government of Karnataka) liable to pay tax shall obtain a Certificate of Registration under the Act. The same should be obtained within 30 days of becoming liable to pay professional tax.
Exemption from Professional Tax Registration in Karnataka
The following class of persons are exempted from payment of Profession Tax.
- All charitable and philanthropic hospitals or nursing homes situated in places below the taluk level in all districts of the State except Bangalore and Bangalore Rural District.
- Directors of Companies registered in Karnataka and nominated by the financing agencies owned or controlled by the State Government or by other statutory bodies.
- Foreign technicians employed in the State provided their appointments are approved by the Government of India for the purpose of exemption from payment of income tax for the said period( exemption is for a period of 2 years from the date of their joining duty).
- Combatant and civilian non-combatant members of the Armed Forces who are governed by the Army Act, the Navy Act, and the Air Force Act.
- Salaried or wage-earning blind persons.
- Salaried or wage earning deaf and dumb persons
- Holders of permits of single taxi or single three-wheeler goods vehicle.
- Institutes teaching Kannada or English Shorthand or Typewriting.
- A Physically handicapped person not less than 40% of permanent disability (subject to production of certificate from the HOD of Government Civil Hospital).
- An ex-serviceman not falling under Sl No.1 of the Schedule.
- A person having single child and who has undergone sterilization operation, subject to production of a certificate from the District Surgeon, Government Civil Hospital, for having undergone such operation.
- Central Para Military Force (CPMF) Personnel.
- Persons running educational institutions in respect of their branches teaching classes up to twelfth standard or pre-University Education.
Penalties for Professional Tax non-compliance
- Penalty for non-registration in case of employer – Rs.1,000/- In case of other persons Rs.500/-.
- Penalty for non-filing of Returns for an employer Rs.250/-.
- Penalty for non-payment of tax by enrolled person and registered employer with interest at rate of 1.25% per month and Penalty not exceeding 50% of the tax amount due.
Further details relating to Karnataka Professional Tax can be obtained from e-prerana
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