What is the process of professional tax registration? [8 steps]

October 27, 2021

This article talks about professional tax registration, professional tax registration online, and the professional tax registration certificate.

An Introduction to Professional Tax Registration: 

This tax is levied by each state government in India and though the name says “Professional”, it is levied upon every employee of an organization; business-men; and even freelancers. 

This tax is an add-on to income tax, and this is subject to the income threshold limit. Indian Constitution Act 276 facilitates each State Government to make/ amend laws pertinent to Professional tax levy on businesses, trades, etc; the maximum limit has been set forth as INR. 2500 per person/ business entity/ per annum.

The following list provides a list of entities that need to pay the Professional tax to the State Government as per the norms set forth: 

  1. Companies which could be the category of firms or LLC (limited liability companies); societies; associations; various clubs
  2. Law firms and Legal Practitioners
  3. Contractors of various lines of business
  4. Freelancers
  5. Chartered Accountants 
  6. Engineers and Doctors/Physicians

Professional Tax is imposed in the following states: 

  1. Karnataka, 
  2. Bihar, 
  3. West Bengal, 
  4. Andhra Pradesh, 
  5. Telangana, 
  6. Maharashtra, 
  7. Tamil Nadu, 
  8. Gujarat, 
  9. Assam, 
  10. Kerala, 
  11. Meghalaya, 
  12. Odisha, 
  13. Tripura, 
  14. Madhya Pradesh, and 
  15. Sikkim.

This kind of tax is a state-level tax that is imposed on income earned through profession, trade, calling, or employment. It is based on slabs depending upon income who may be self-employed or working as an employee. At present, the maximum tax that can be imposed is restricted to Rs. 2,500. 

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Professional Tax Registration

Is it possible to do a professional tax registration online? For professional tax online registration, read below: 

What is the requirement? 

Thanks to the internet world, most of the processes have become easier; so as towards Professional Tax registration online. Though the registration towards Professional Tax online registration application varies from one state to another, the overall requirement could be the same. The form could be filled in with a copy of PAN and residence proofs of Directors/partners of all concerned if it is been applied for a company. Also, the Memorandum of Association and the Current Bank Account details need to be submitted.

In case the business entity is spread across states, then the business owner has to get a professional tax registration for all the states.

The delay in the payment of Tax will have an impact on penalty according to the norms set forth by State Government.

There are broadly two types of Professional Tax certificates issued. One is PTEC and the other is PTRC.

PTEC stands for Professional tax enrolment certificate and this is entitled to be paid by the business entity, owner, Freelancers, Consultants, and Professionals.

PTRC stands for Professional tax registration certificate and this is entitled by the employer (Government or Private) who would deduct the applicable tax amount from the employee’s salary and deposit the same to the State Government.

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What is the procedure for professional tax online registration? 

  1. The individual must apply for registration of professional tax by visiting the online portal. 
  2. Register, fill out details such as mobile number, email ID, etc. and the individual will receive a unique user name and password through mobile and email. 
  3. An application must be submitted for professional tax – the individual must log in and complete the self-assessment application 
  4. The documents that have to be uploaded are as follows: 
    1. Certificate received from the Registrar of Companies 
    2. Memorandum of Articles 
    3. Proof of Office 
    4. The certificate you receive from the commercial tax department 
    5. Pan Card and Bank Account details 
    6. Employer & Employee specialties
  5. No sort of fee will be asked to pay during the time of submission of the application 
  6. Once the application is submitted, an acknowledgment slip will be generated. The slip will come with a professional tax registration number. 
  7. Now, the assessee shall pay the tax online. 
  8. After payment, please download a copy of the professional tax assessment order from the website. 
professional tax registration

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What about the professional tax registration certificate? 

Employers in specific states are required to deduct taxes from salary when paid to one or more employees – for example, this is when the payment exceeds Rs. 5000 in Maharashtra. The entity is required to obtain a registration certificate. 

When an individual is employed by two or more employers – their salary exceeds Rs. 5000 (in Maharashtra, please look into the limit for your state) but the employer is not deducting professional tax, then the individual must receive an enrolment certificate from the authorities. 

Are there other costs attached to the professional tax registration process? 

Professional Tax is state-level tax, and the applicable government charges vary from state to state.

If you require more information and assistance on Professional Tax Registration, contact one of the executives from eSahayak.

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