Professional Tax Registration

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Professional Tax Registration

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What is Professional Tax Registration?

Professional Tax is a tax collected by State Governments from the professionally occupied business entities. A person earning income from salary or professions such as Chartered Accountants, Company Secretaries, Lawyers, etc. is required to pay professional tax. For the purpose of this registration, the employers, professionals, traders, etc. come under the purview of registration.

This tax is deducted from the salary of the employer, which is later eligible for deduction from the computation of taxable income. The registration is obtained by the employers and business owners with the respect Municipal Corporation. Being it State based registration, the rate of tax and method of registration is different. Further, there are two types of registrations being – PTEC and PTRC registrations.

Benefits of Professional Tax Registration in India

Documents required for Professional Tax Registration

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ParametersImporter Exporter CodeGST RegistrationProfessional Tax RegistrationShop & Establishments RegistrationMSME Registration
Applicable ToAll importers and exportersBusinesses exceeding prescribed threshold for turnoverApplicability defers based on State ActApplicability defers based on State ActAll Micro, Small and Medium Enterprises
Registration CriteriaMandatoryMandatoryMandatoryMandatoryVoluntary
Any business entity undertaking import/export for business purpose from IndiaIf turnover exceeds ₹ 20 Lakh or entity fall under specified category, registration is mandatoryA person earning income from salary or by practicing any profession has to pay the professional taxAll entities need to get registered under shop and establishments at the time of setting up their businessIt is not mandatory to register under MSME. Any business entity if wishes can get registered under MSME
Regulatory bodyCentral GovernmentState and Central GovernmentState GovernmentMunicipal CorporationCentral Government
The code is granted by Directorate General of foreign Trade, Central GovernmentThe tax is segregated into two parts CGST (central) and SGST (state)The tax is based on income slab-rates decided by state GovernmentGoverned by Municipal Corporation under whose jurisdiction the business place is situatedMSMEs comes under centrally based Ministry of Micro, Small and Medium Enterprises
Return FilingsNoYesYesNoNo
No return are prescribed to file after registrationAnnually, monthly or quarterly based on GSTR typeMonthly or yearly based on professional tax liabilityNo returns are to be filed after this registrationNo returns are to be filed after this registration
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Frequently Asked Questions

The responsibility to obtain a registration lies with the owner of the business or profession. The business owner/employer is required to deduct the professional tax based on the professional tax slab from the salaries of employees and pay the same to Government before the 15th day of each month or quarter as applicable.

Also known as the Professional Tax Enrolment Certificate (PTEC), this registration is obtained for the payment of taxes by the employers.

The employers are required to obtain the registration when employees are appointed. This makes the employees eligible to deduct the professional tax from his employee’s salaries. Registration should be obtained within the 30 days of employing staff.

The State Governments of the following states have levied professional tax:

Punjab, Bihar, Karnataka, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Sikkim, Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh.

The maximum amount payable per annum towards the professional tax is ₹  2,500. The professional tax is usually a slab-amount based on the gross income of the professional. It is deducted from the employee’s income every month.

Yes, if you have more than one place of work, you have to make a separate application for professional tax registration to the concerned authority.

For delays in obtaining Registration Certificate, a penalty of ₹ 5/- per day is levied. In case of non/late payment of profession tax, the penalty will amount to 10% of the amount of tax. In case of late filing of returns, a penalty of ₹ 300 per return will be imposed.

The due date for the payment of Profession Tax is 30th June for the employees enrolled before 31st May of the year. The people enrolled after 31st May of a year are requested to pay Profession Tax within one month from the date of enrolment. Employers are requested to file monthly return along with due payment of tax.

In cities like Ahmedabad, both the registration must be obtained simultaneously. In a few places, Shop & establishment registration is a requirement for this application. Hence, it depends on the law of where the jurisdiction of the premise is situated.

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Professional Tax Registration

Get registered under professional tax in 3 easy steps
Get Started