A professional tax is a tax levied by the State on the Income earned by way of a profession, trade or employment. This form of tax was first levied in India in the year 1949 and the power to levy professional tax had been given to States by way of Clause (2) of Article 276 of the Constitution of India. A Professional tax in India is collected by some states themselves while in several other states which have active Panchayats, local bodies themselves levy this tax. A person who is liable to pay this Tax shall apply for professional tax registration in the prescribed form with prescribed authority.
Any amount paid as Professional Tax to the State Government is allowed as a deduction under Section 16 of the Income-tax Act, 1961, and Income tax on the Balance amount is levied as per the Income Tax Slab Rates in force. In the case of Salaried and Wage-earners, professional tax is liable to be deducted by the Employer from the Salary/Wages and the employer is liable to deposit the same with the state government. In the case of other individuals, this tax is liable to be paid by the person himself. Whether it’s a big organisation or a small organisation the task of registering professional tax can be very difficult, so getting professional help from the experts of Mibook is the best option.
To register professional tax in India, one can get it done by availing sterling and accommodating services of Mibook.
The maximum amount to be paid as professional tax is Rs.2500 however, dependent on the gross income of the professional.
As per the definition professional and income tax are quite similar with the only difference that professional tax is paid to the state government. After registration of professional tax in India, every month the tax amount will be deducted by the employer. And this amount is deducted from the salary of employees under the professional tax section that needs to be deposited to the respective state government.
An individual or employer must submit an application for professional tax registration in Bangalore to the state tax department within 30 days of employment. If a person works in more than one place then registration for professional tax has to be done separately to the authorised department respectively considering the place of business is under which jurisdiction.
In case of failure in payment of tax or there is late payment then there is a penalty of 10 % of tax and a penalty of three hundred rupees is charged. Delay in the deposition of professional tax can result in a penalty of Rs.5/day for all days of delay.
Mibook delivers you well-planned and structured services for the timely professional tax registration Bangalore.
Professional Tax Registration in Bangalore, India is applicable for the individuals and entities mentioned below:
Limited Liability Partnerships
Hindu Undivided Family
Management Professionals as well as Medical Representatives such as doctors, etc.
Individuals serving in the Central Para Military Force (CPMF)
People who run educational Institutions teaching up to class 12
Handicaps with at least 40% disability. A relevant Certificate must be submitted.
Any person who has a permit for a single three-wheeler or a single taxi to carry goods.
Individuals who are deaf, dumb, and blind are earning a salary.
Civilians as well as non-civilian members from the armed forces.
Technicians from foreign countries who are employed by the state
As the state government levies the professional tax that’s the major reason it differs in each state. Each state declares a slab, and the professional tax is deducted based on these slabs. In many states and union territories, the professional tax is not registered as it is not charged at all. The professional tax is paid in 12 equal installments, in such situations where the source of income is falling under the sectors they will be liable for separate tax.
As each state has its regulations and laws on the professional tax registration in Bangalore thus professional tax varies from state to state. However, a slab system is followed by all the states. The slab system is based on the income of the individual. Hence, the state government levies the tax based on income. Understanding and acting accordingly require a lot of time and focus. Mibook has a set of procedures following which makes the registration process easy and reliable for an organisation.
There are two types of Professional tax certificates:
This is paid by the business entity, owner, or the professional i.e. Private or the Public Limited Company, Sole proprietor, Director, etc.
The government or the Non- government employer deducts the tax from the employee's wages and deposits the same to the government.
A self-attested copy of ID proof of Proprietor/ Partner/ Director
Self-attested copy of address proof of Proprietor/ Partner/ Director. Shop and Establishment Certificate(if any )
3 copies of passport size photograph of the Proprietor/ Partner/ Director
MOA – AOA of Company, Partnership Deed/ LLP Agreement, etc. along with the registration certificate, if any
1. Registration Requirement for Consultation
2. Collection of Basic Information
3. Provide Required Documents
1.Preparation of registration application
2. Application for professional tax registration
1.Processing by Government Department
1.Professional Tax Registration Certificate
Generally, all individuals who are earning Rs. 10,000 or more every month are eligible for professional tax registration in Bangalore.
Those who are earning between the slab of Rs. 10,000 to 15,000 are eligible for paying Rs.150 as professional tax and if earning is more than 15,000 then Rs.200 per month has to be paid as professional tax.
For legal and medical practitioners or professional consultants, the rate of professional tax depends on the tenure of their service.
In order to claim professional tax in ITR filings as a professional or an entity, the individual must declare his/her gross income as per the ITR form that needs to be filled out. After considering all other aspects such as rent, investments, etc. the professional tax liability for a year has to be quoted.
If professional tax is paid monthly or quarterly by a company the ITR for the same has to be filed along with the required documents and the amount of Professional tax paid has to be mentioned in the ITR.