Professional Tax Registration Online in India

• Professional Tax registration is essential for employers and individuals engaged in professions or trades. Obtaining a registration certificate is a requisite. Professional Tax serves as a state's revenue source. Simplified tax registration and enrollment are now accessible through Legalitis Company.

• In India, Professional Tax, regulated by state governments, applies to salaried individuals. While states like Delhi, UP, and Haryana are exempt, this tax is applicable to various professionals including chartered accountants, doctors, and lawyers. Its imposition hinges on one's employment, business, or profession. Business owners and freelancers must pay once their earnings surpass a specified threshold. Tax rates differ among states; the maximum annual Professional Tax is Rs. 2,500.

Who Pays Professional Tax in India?

Self-employed individuals engaged in various professions, businesses, and trades fall under the category of Professional Tax registration. They hold the legal obligation to remit this tax to the state government. The Commercial Taxes Department administers its collection, and tax slabs vary by state. Calculated from annual taxable income, it can be paid annually or monthly. Obtaining an Enrolment Certificate in the prescribed format from the authorized body is mandatory for self-employed individuals.

For salaried individuals or wage earners, Professional Tax is deducted monthly from their salary. An employer must have a registration certificate from the relevant authority before depositing the deducted amount.

Benefits of Professional Tax Registration Online in India

There are several compelling reasons why one should never overlook professional tax:

1. Legal Requirement: Professional tax registration is a legal obligation. Avoiding it can lead to penalties or legal repercussions. Both self-employed individuals and employers must fulfill their professional tax responsibilities as per state rates and wages within the specified timeframe.

2. Simplicity and Compliance: Professional tax is straightforward and easy to comply with. The rules and regulations are not overly restrictive, making registration and adhering to monthly or annual compliances a straightforward process.

3. Claiming Deductions: Past payments of professional tax can often be claimed as deductions.

4. Local Tax Authority: Professional tax is a state-level obligation managed by local tax authorities. It ensures tax deduction from professionals' fees, business income, and salaries, contributing to local revenue.

Professional Tax Applicability

The Professional tax is applicable to the following class of individuals in states where they are working:

• HUF
• Individual
• One person Company/Private/Public
• Co-operative Society
• Body of Individuals
• Association of Person

Payment of Professional Tax

1. Rate and Frequency: Professional tax is deducted based on predefined slab rates set by the state's Commercial Tax Department. It can be collected either on a monthly or annual basis.

2. Self-Employed Individuals: Self-employed individuals can pay their professional tax directly online to the concerned state's tax department. They should obtain a Certificate of Enrollment from the respective tax department.

3. Salaried Individuals: For salaried individuals, it is the responsibility of the employer to deduct the professional tax from employees' salaries. This deducted amount is then deposited to the state government.