Professional Tax

What is Professional Tax?

Professional Tax is a tax that states charge on people earning money through salaries, professions, or trades. Employers deduct this tax from employees' salaries and submit it to the state government. Self-employed individuals are responsible for paying the tax directly to the state tax authorities.

The tax amount is based on state-specific slab rates, with a maximum annual limit of professional tax is ₹2,500.

Who Needs to Register?

• •   Employers: Must register and deduct professional tax from employees' salaries.
• •   Salaried Employees: Subject to tax deduction based on state slab rates.
• •   Self-Employed Professionals: Lawyers, doctors, CAs, and others must register and pay the tax directly.
• •   Business Owners: Businesses and traders must register and comply with professional tax laws.

Documents Required for Professional Tax Registration

The required documents for Professional Tax Registration for both employers and individuals may vary from state to state, but the general list includes:

• •   For Employers :
  • •   PAN Card of the company/firm
  • •   Certificate of Incorporation/Partnership Deed
  • •   Address proof of the business (rental agreement, utility bill).
  • •   Employee details: List of employees, their salaries, and appointment letters
  • •   Salary details: Salary structure of employees
  • •   Bank account details of the company/firm
• •   For Self-Employed Individuals :
  • •   PAN Card of the individual
  • •   Proof of profession: Certificate of practice or any proof of professional work (lawyers, doctors, etc.).
  • •   Address proof: Utility bill, rental agreement
  • •   Bank account details of the individual

Penalties

Failure to register or pay can result in fines, late fees, and interest penalties.

For help with Professional Tax Registration, contact Prahar Filing & Advisory for expert assistance.