Professional Tax
The state government levies the tax, which applies to salaried employees and professionals such as chartered accountants, lawyers, and doctors.
As per Article 246 of the Constitution of India, only Parliament has the exclusive power to make laws concerning Union List, which includes taxes on income. The state has the power to make laws only concerning the Concurrent list and State list. However, Professional tax, though is a State Government levies a kind of tax on income.
What is Professional Tax Registration?
Professional Tax registration is mandatory for the business within 30 days of employing staff and for professionals within 30 days of practicing. The professional tax has to be deducted from the salary/wages paid. However, the amount of professional tax varies from state to state, which is capped at Rs. 2500 per annum. If you have employees in more than one state, then professional tax registration must be obtained in each state.
Rate of Professional Tax
Professional tax being levied by State Government is different in different states. Every state has its own laws and regulation to govern the professional tax of that particular state.
Responsibility of collection and payment of Professional Tax
The Commercial Tax Department collects professional tax. The commercial tax department of the respective states collects it, which ultimately reaches the fund of Municipality Corporation.
In the case of employees, an employer is a person responsible for deducting and paying professional tax to the State Government.
In the case of trade or profession, the owner pays professional tax for the firm.
Procedure to pay Professional Tax
Every state has specified its own procedure towards payment and compliances thereof.
A consequence of violation or non-compliance
Every state has a laid-down penalty procedure for non-compliance with professional tax legislation.
How can SattvaCFO help us?
All you need to do is call us or email us for a hassle-free experience.
