Ultimate Professional Tax Guide For Business Owners!

Everything You Need To Know About Professional Tax  

Professional Tax is the tax imposed by the state government on the gross salary earned by means of a business, trade, profession or employment. The state government levies taxes from the income of the employees on the basis of slab rates fixed by the state. Making Professional Tax Payment is the liability or duty of every business owner.

The professional tax, the slab rates, professional tax payment rules, etc. varies from state to state. All individuals who are legally responsible for paying this tax needs to apply for a registration form with the concerned authority of your own state as per the rules and regulations of your state government. Nowadays, Professional Tax Online Payment is quite popular that avoids waiting in queues at the state tax office to pay the tax amount.

Professional Tax Enrolment And Registration

A business owner should possess both the certificates of professional tax enrolment as well as professional tax registration. Based on the rules imposed by your state government you need to either register for professional tax by filling a form or apply for it online. Most state governments have provisions for professional tax registration on their website. Upon receiving a request for a Certificate of Registration, the verification process will start. Once your request is processed and verified, you will receive the Enrolment Certificate.

It is important to get this certificate as only after which you can make professional tax payment by deducting professional taxes from the income of your employees. Private companies, Partnership firms, Sole proprietors, etc. need to apply for enrolment certificate as soon as they can.

Rules And Calculations For Professional Tax Payment 

The deduction of professional tax is made from the gross salary of an employee for a particular month. Hence, the first step is to calculate the gross salary. This is calculated by subtracting the gratuity, employee provident fund or the EPF, leave deductions, etc from the annual CTC of an employee. The professional tax deduction is made by the business owners from this gross salary of the employees based on the slab rates set by the state government.

All employees within a company who enjoy the privilege of salary or wages are required to pay the professional tax by calculating on the basis of the slab rates predetermined by the government of the state. It is the liability of the owner of a company or business to ensure that professional tax deductions are made and the amount is paid to the government.

The rules of professional tax payment vary from state to state as it is based on the minimum wage calculations of each state as well as the income levels. For example, the Delhi state does not levy professional tax from the salary earning individuals while the state of Maharashtra levies from 175 rpm to 2500 rupees per annum based on income levels of the male and female.

Professional Tax Registration And Payment Methods 

The registration can be either done online or offline. The link for online registration can be obtained from the website of your respective state government. If you are uncomfortable with the online method, you can also directly approach the sales tax office in your district which is nearest to you and complete the formalities for enrolment. Make sure that you take along with you the important documents relevant to your business while going for registration. The details of documents to be taken can be obtained online or you could enquire in the sales tax office as well.

Most states offer both modes of payment – Professional Tax Online Payment as well as offline payment. Net banking is the easiest way if you are familiar with it. Otherwise, you should make the necessary steps for setting up online banking for your bank account and then visit the state government website to complete the professional tax payment transaction.

The professional tax was introduced in the year of 1949, and was later modified in 1988, to ensure that businesses receive the infrastructure from the state for running them smoothly. The maximum professional tax that can be levied by the state from an employee is 2500 rupees annually. Make sure to pay your taxes on time for your business to function well!