Professional Tax is a Tax levied by the State on the income earned by way of profession, trade, calling or employment. Based on the salary or income levels, the tax is calculated and the same is deducted from the salary by the employers.
If this tax is not paid, the employer who has a certificate from the Government tax department is considered answerable.
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As per the Professions, Trades, Callings and Employment Act 2000 passed by the government, professionals earning a particular monthly income or more are liable to pay professional tax. Professionals refer to people who are specialized professions like doctors; professionals in journalism, Information Technology, etc.
The rate of professional tax levied varies from state to state in India. One must verify the prevailing tax rate of their particular state before paying the tax.
An employer organization is required to get registered and take profession tax number (PTRC).
PTRC gives a power to the company to deduct Professional tax from the Employee’s salary and paid it same to the Government..
Every person doing any business or profession is liable to obtain a Certificate of Enrollment from the Profession Tax Authority. Once this certificate is obtained a person is liable to pay profession Tax.
PTEC is the corporate liability of the company.
As Profession Tax are a state Govt. tax rate and other provisions changes state to state.
For example in Maharashtra PT rate are fixed to 2500 per entity except in case of employee drawing salary less than 10000 per month where it Rs.2000 per year .
Certain class of entity and individual are exempt from payment of profession tax.
For example in Maharashtra for Sr. Citizen Profession Tax is exempt..
Yes, you can make Application for Professional Tax online .
An employer organization is required to get registered under the Profession Tax Act and obtain a Registration Certificate under which the payment in respect of taxes deducted from employees salaries can be made. Also as a firm, the organization is required to obtain Enrollment Certificate and pay Profession tax on it’s behalf.
Delays in obtaining Enrollment or Registration Certificate – Penalty of Rs. 2/- (Rupees Two) per Day.
Providing false information regarding enrollment – Penalty of 3 times tax amount.
Non-payment of profession tax – Penalty equal to 10% of the amount of tax can be imposed.
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