Professional Tax Registration

Professional Tax Registration is critical for all types of business owners, whether they are sole proprietors, partnerships, corporations, or partnerships. It’s a way to give back to the community where you’re starting your business. The penalties for delaying registration or payment of the Professional Tax are severe, so it’s best to abide by the rules and regulations

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  • Every business owner, professional, and trader needs to sign up for professional tax registration. It’s a way to help the state where your business is starting out. If you don’t register or pay your Professional Tax on time, you’ll have to pay penalties, so it’s best to follow the rules.

  • Professional tax is a tax that every person who makes money needs to pay. The way the professional tax is calculated and how much is taken in vary from one state to the next. But the amount is capped at Rs. 2500 per year. The Commercial Tax Department of each state collects the Professional tax at a rate that has already been set. This is done either once a year or once a month. It is paid directly by self-employed people who work in a profession or trade business. For salaried employees, it is the employer’s job to pay the Professional tax to the State Government by taking the tax out of their pay and sending it to the State Government.

  • Professional tax is a tax that is put on all kinds of professions, trades, and jobs, and it is based on how much money they make. It is charged to employees, people who run a business, such as freelancers, professionals, etc., if their income is more than a certain amount.

  • According to Article 246 of India’s Constitution, only Parliament can make laws about the Union List, which includes taxes on income. Only things on the Concurrent and State list can be made into laws by the state.

  • But professional tax is a type of income tax that the state government charges (not all states in the country chose to levy professional tax). Article 276 of the Constitution of India, which deals with taxes on professions, trades, callings, and employment, gives the State Government the power to make laws about professional tax, even though it is a tax on income. The Income-tax Act of 1961 says that professional tax is a deductible amount that can be taken out of taxable income.

  • Many states have made it necessary for employers to take money out of employees’ pay-checks and pay the service tax if they don’t have a Professional Tax Certificate. It makes a number of things possible, such as:


  • Section 16 of the Income Tax Act of 1995 says that employees can get tax breaks based on how much they paid for Professional Tax.

  • The taxpayer will be able to take the deductions in the same year that the payment was made. Since signing up for Professional Tax is required by law, not doing so can lead to fines and penalties that may get worse over time.

  • The rules about Professional Tax are easy to follow, and the Registration process can be done quickly.

  • Professional Tax is a way for State Governments to get money, which helps them run many programmers to help people and improve the area.

Documents To Register Professional Tax

  • Acknowledgment of the online form, along with a hard copy of the submitted digital form.

  • If the applicant is a company, you will need the company’s COI, AOA, MOA, and PAN.

  • Proof of identity and proof of address for each director, as well as a photo the size of a passport.

  • The company’s bank account information, a bank statement, and a cancelled check.

  • Proof of where the company is based. But if you rent a home, you need a NOC from the owner.

  • In the case of a company, a Board Resolution is needed, and in the case of a partnership, the Partner in question must sign a Declaration of Consent.

  • Pay-checks and a record of who was there

The professional tax rules provide exemptions for a few individuals; the exemptions are different 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 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.

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How do professionals pay their taxes? Is there a tax return to be made?+

Again, this is a question about a certain State. But in general, you can pay a professional tax either online or in person. Also, depending on what the state requires, tax returns for professionals need to be filed at certain times.

Who is in charge of professional tax collection and payment?+

The Commercial Tax Department is in charge of professional tax. The commercial tax departments of each state collect it, and it goes to the municipal corporation fund in the end.

.What is the most a state can charge for a professional tax?+

A state can only charge a professional tax of up to Rs. 2,500.

Who is in charge of taking the tax out of the money and giving it to the government?+

For people who work for themselves, the tax has to be paid by the person themselves. When a person is working for someone else, it is the employer’s job to pay the tax.

At what point does an employer have to start paying Professional tax?+

The employer will be responsible for paying taxes when he or she pays taxable wages to an employee for the first time.

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