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PROFESSIONAL TAX REGISTRATION

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What is Professional Tax?

Professional tax is the tax by the state governments in India. Professional Tax is a tax levied on professions and trades in India. The owner of a business is responsible to deduct professional tax from the salaries of his employees and pay the amount so collected to the appropriate government department.

Anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this professional tax.

Different states have different rates and methods of collection. In India, professional tax is imposed at the state level. The states which impose professional tax are Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, and Sikkim.

Applicability of Professional Tax

Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax.
Applicability of Professional Tax as per the Constitution of India: Article 276 of the Constitution of India provides that “there shall be levied and collected a tax on professions, trades, callings and employments, in accordance with the provisions of this Act. Every person engaged in any profession, trade, calling or employment and falling under one or the other of the classes mentioned in the second column of the Schedule shall be liable to pay to the State Government tax at the rate mentioned against the class of such persons in the third column of the said Schedule.
Provided that entry 23 in the Schedule shall apply only to such classes of persons as may be specified by the State Government by notification from time to time.”

Documents required for Professional Tax Registration.

FOR COMPANIES/LLP/PARTNERSHIP/INDIVIDUAL

  • PAN card of Company, PAN card of LLP/Partnership Firm, PAN card of Proprietor as the case may be and PAN card must be attested by the Director/partner/Individual.
  • Certificate of Incorporation of Company, Certificate of Incorporation of LLP or Registration copy of Partnership deed as the case may be
  • Memorandum and Articles of Association of the company
  • Premises proof: Ownership papers in case the premises is owned by the applicant, in other cases rent agreement and no objection certificate from the owner of the premises.
  • Bank Account details, Cancelled cheque and Bank Statement.
  • List of Directors, Partners
  • Passport size Photographs of all Directors, Partners, proprietors.
  • Documents of the Directors/partners/Proprietor: PAN card + ID proof such as Passport, Driving Licence, Voter Card, Aadhar Card is acceptable + address proof as Electricity Bill, Telephone Bills and other utility bills.
  • Board Resolution passed by the Director of the Company authorizing Professional Tax Registration. Partners consent for application to register under Professional Tax.
  • Authorization Letter for obtaining user ID and Password of Professional Tax Department.

What is Professional tax registration certificate (PTRC) and Professional tax Enrollment certificate (PTEC)

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 Enrolment 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.