P TAX
The respective state governments in India levy the professional tax on income from profession or employment. The professionals earning an income from salary or other practices such as a lawyer, teacher, doctor, chartered accountant, etc. are required to pay professional tax.
Professional Tax varies from state to state. There are different set of rules and regulations to govern the same depending upon the state; however, all states follow a slab system based on the income to levy professional tax.
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NATURE OF PROFESSIONAL TAX (P.TAX)
The respective state governments in India levy the professional tax on income from profession or employment. The professionals earning an income from salary or other practices such as a lawyer, teacher, doctor, chartered accountant, etc. are required to pay professional tax.
Professional Tax varies from state to state. There are different set of rules and regulations to govern the same depending upon the state; however, all states follow a slab system based on the income to levy professional tax.
In case of salaried and wage earners, the professional tax is liable to be deducted by the employer from the salary/wages and the same is to be deposited to the state government. In case of other class of individuals, this tax is liable to be paid by the employee himself.
The tax calculation and amount collected may vary from one state to another, but it has a maximum limit of INR 2500/- per year.
TYPES OF PROFESSIONAL TAX
The types of Professional Tax are enlisted below:
- PTEC (Professional Tax Enrolment Certificate)- This type of professional tax is paid by the business entity, i.e. Private/ Public Limited Company, owner or a professional, i.e. Sole Proprietor or Director Etc. through this certificate
- PTRC: (Professional Tax Registration Certificate)- Here, the Government or Non- Government employer deducts the tax from the employee’s salary and deposits the same to the government.
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BENEFITS OF P.TAX REGISTRATION
The benefits of Professional tax Registration is given below:
- Imposes Minimal Restriction– It is simple to comply with the Professional Tax Compliance, which results in a smooth registration process with minimum restrictions.
- Helps In Avoiding Penalty- It is compulsory to pay Professional tax as per the law. Hence, the timely payment of Professional tax can help avoid penalties and any punitive action against the employer or a self-employed person.
- Enables Smooth Registration Process- Professional Tax Compliance is simple, which can enable a smooth and hassle-free Registration Process.
- Helps In The Implementation Of Development And Welfare Programs – The Professional Tax acts as a revenue source for the state governments that helps the government to implement schemes for the various welfare and development of the region.
- Can Claim Deduction- The employer or the self-employed person can claim a deduction on the previously paid professional tax.
DOCUMENTS REQUIRED FOR P.TAX REGISTRATION
To register for P.TAX the employer has to submit the following documents along with the application:
- Application Form
- In case the applicant is a Company, the company’s COI, AOA & MOA, and PAN. (Attested by the Director).
- Address proof and Identity proof of all directors, along with the passport size photo
- Bank account details of the Company along with a bank statement and cancelled cheque.
- Proof of Registered Office can be a rent agreement in the case of rented property, NOC from the owner.
- Board Resolution in case of a company-and the Declaration of consent by the concerned Partner In case of Partnership along with Salary and attendance register.
