One crucial component of managing a business is paying taxes. In particular, professional tax is a charge levied on people and organizations in India by state governments on a variety of occupations, trades, and professions. Businesses must comprehend professional tax registration and abide by it to operate lawfully and avoid fines. We will examine the intricacies, importance, and procedures of professional tax registration in this guide.
What is the Professional Tax Rate?
The highest amount of professional tax that can be paid annually is INR 2,500. Professionals typically pay a slab amount of professional tax, which is determined by their gross income. Every month, it is subtracted from his income.
The nodal agency responsible for collecting professional tax based on predetermined tax slabs, which differ for each state and union territory, is the Commercial Taxes Department. Although it can be paid either annually or monthly, the tax is computed based on the individual’s yearly taxable income.
Who Needs to Register for Professional Tax?
- Directors of businesses with paid salaries.
- Salary payments are made to employers who hire employees.
- Proprietors of businesses who work in crafts or professions.
- Independent contractors who offer their clients services.
- Professionals who work for themselves, including physicians, attorneys, architects, and chartered accountants.
Documents Required for Professional Tax Registration
- MOA and AOA
- Additional registrations and licenses
- Details of employees and salaries paid
- Certificate of Incorporation / LLP Agreement
- Passport-size photos of Proprietor/Owner/Director
- PAN Card of Company/LLP/Proprietor/Owner/Director
- NOC from the landlord, where the business is situated
- Address and identity proof of Proprietor/Owner/Director
Process for Online Application for Professional Tax Registration
- To register for professional tax, go to the state government’s web portal of choice.
- The applicant will receive a special username and password on their registered email and mobile device after entering their personal information.
- The next step is for the applicant to prepare and submit a self-assessment application for professional tax purposes.
- After that, the application must be uploaded with the necessary files.
- Generally, there are no fees associated with applying professional tax if one visits the state government website directly rather than via a third party.
- An acknowledgment receipt is generated upon submission of the application and is used to file the tax return. Acknowledgment receipts and professional tax registration numbers will be generated together.
- Following registration, the candidate has the option of paying the professional tax offline or online.
- The assessor can obtain a copy of the professional tax assessment from the relevant state government website following the payment of professional taxes.
- The relevant authority will verify the applicant’s details after a professional tax assessment has been created.
- The authority will either confirm or amend the assessment after the verification is finished.
Benefits of Professional Tax Registration
- Professional Tax Compliance is easy to follow, which leads to a seamless registration process with few limitations.
- According to the law, professional tax must be paid. Therefore, professional tax payments made on time can aid in avoiding fines and other punitive measures taken against the employer or independent contractors.
- Because professional tax compliance is straightforward, the registration process may be easy and uncomplicated.
- The Professional Tax serves as a source of funding for state governments, enabling them to carry out various programs for the welfare and regional development.
- A deduction for professional taxes previously paid may be claimed by the employer or the self-employed individual.
Professional Tax Registration Certificate Download
- Visit the official website of the professional tax department in the state where you are registered.
- Go to the section where Professional Tax Registration Certificates are available for download.
- Enter your Permanent Account Number (PAN) or Professional Tax Registration Number (PRN) to view your certificate.
- For your records, make a copy of your certificate.
How to Surrender a Professional Tax Registration Certificate?
- By signing into your account, submit the cancellation application online.
- Copy the Acknowledgment to the paper.
- Please give the department the following document. Application for cancellation with a five rupee court fee.
- Original certificate of professional taxes.
- Original copy of the Challan.
- Authority letter in support of the departmental participant.
- Proof of closure (bank statement, financial statements from the previous year, salary register, etc.).
- The department will cancel the certificate in 30 days after you have turned in all necessary paperwork; you can check the status online.
- Remember that unless the department cancels it, you must finish the mandatory return.
FAQ for Professional Tax Registration
Q1. Is professional tax in New Delhi Mandatory?
In India, the majority of state governments impose professional tax as a mandatory tax on people who have a steady source of income. In New Delhi, professional tax payment is required.
Q2. What is the New Delhi professional tax rate?
In New Delhi, professional taxes begin at Rs 100 per month. Those who make more than Rs 50,000 but less than Rs 75,000 must pay this sum. In Delhi, the highest monthly PT is approximately Rs 200.