Business-License & Registration

PROFESSIONAL TAX & PROCESS: ABOUT: Profession Tax is a direct tax that is levied on persons earning an income by way of either practicing a profession, employment, calling, or trade. Self-employed persons who carry out their profession or trade on their own and fall in the ambit of professional tax are liable to pay the tax themselves to the state government. in the case of salaried individuals and wage earners, the employer is liable to deduct professional tax from the employee’s salary on a monthly basis (as per the applicable professional tax slab) and deposit the same with the state government. The Commercial Taxes Department of a state/union territory is the nodal agency that collects professional tax on the basis of predetermined tax slabs which vary for each state and union territory. The tax is calculated on the annual taxable income of the individual, however, it can be paid either annually or monthly. In case the company has its presence in different places, then it is required to take registration for each such place. A maximum of Rs. 2,500 can be levied as a professional tax on any person per financial year. Profession Tax Is Deductible Under Section 16 (iii) Of The Income Tax Act According to Section 16 (iii) of the Income Tax Act 1961, the professional tax paid by an employee is allowed as a deduction from his/her gross salary income. Exemptions to Certain Persons for Professional Tax: • Foreign employees are exempt from paying professional tax. • Individuals who run educational institutions that teach classes up to the twelfth standard. • Individuals in the Central Para Military Force (CPMF). • An individual who has one child and has undergone a sterilization operation. However, the relevant documents must be submitted. • Any ex-serviceman who comes under SI. No.1 (Schedule) • Any handicapped individual who has at least a 40% disability. However, the relevant certificate must be submitted. • Individuals who have a permit for a single three-wheeler or a single taxi to carry goods. • Deaf, dumb, and blind individuals who are earning a salary. • Civilian non-combatant and combatant members who are part of the Armed Forces. However, the Army Act must govern the Armed Forces. • Foreign technicians who have been employed by the state. PROFESSIONAL TAX COMPLIANCE: All people subject to professional tax are subject to the following compliances • Registration • Payment of tax • Return filing a) Monthly b) Annually The above mentioned are discussed hereunder: PROFESSIONAL TAX REGISTRATION: There are two kinds of Professional Tax Registrations: 1. Professional Tax Employer Registration: All businesses and organizations are required to obtain employer registration regardless of the number of employees working in the organization. The procedure of registration is based online, after submission of application Professional Tax Enrolment Certificate i.e. PTEC (registration certificate), is issued by the Commercial Tax Department. 2. Professional Tax Employee Registration: Every employer is required to obtain professional tax employee registration on behalf of the employees. Professional tax for the employee is deducted by the employer. The certificate obtained is known as Professional Tax Registration Certificate known as PTRC. Professional Tax PAYMENT: An employer is required to pay two types of professional tax, one is the professional tax for his/her/its business known as PTEC and another is professional tax deducted from the salaries of employees known as PTRC. These taxes are payable monthly, annually, semi-annually based on the law of the state. Professional Tax RETURNS: Similar to the payment of tax, an employer is required to file two types of professional tax Returns, one is a professional tax Return for his/her/its business (PTEC) and another is a professional tax Return for employees (PTRC). These returns are filed monthly, annually, semi-annually based on the law of the state. The major Indian States and Union Territories Which Levy Profession Tax: Following are some of the Indian states and union territories where professional tax is applicable:- 1. Andhra Pradesh 2. Karnataka 3. Maharashtra 4. Tamil Nadu 5. Assam 6. Kerala 7. Meghalaya 8. Tripura 9. Bihar 10. Jharkhand 11. Madhya Pradesh 12. West Bengal 13. Manipur 14. Mizoram 15. Odisha 16. Puducherry 17. Sikkim 18. Telangana 19. Nagaland* 20. Chhattisgarh 21. Gujarat The major Indian States and Union Territories Which Do Not Levy Profession Tax: Following are some of the Indian states and union territories where no professional tax is applicable:- 1. Arunachal Pradesh 2. Himachal Pradesh 3. Delhi 4. Haryana 5. Uttar Pradesh 6. Uttarakhand 7. Andaman and Nicobar Islands 8. Daman & Diu 9. Dadra and Nagar Haveli 10. Lakshadweep 11. Jammu & Kashmir 12. Punjab 13. Rajasthan 14. Chandigarh 15. Goa Consequences of Violating Professional Tax Regulations: 1. Fails to Get Registration He will be liable to a penalty for the period during which he remains unregistered. 2. Fails to Deposit to the Government/ Late Deposition He will be liable to a penalty for the period during which he remains unregistered. 3. Non-Deposition of Amount. The officials have the power to recover such amount along with applicable penalty and interest from the assets of such defaulter. Moreover, they can attach his bank account also. In serious cases, a prosecution case also can be filed. DOCUMENTS REQUIRED FOR PROFESSIONAL TAX REGISTRATION: • Incorporation Registration / Certificate • Business PAN Card • MOA & AOA of Company or LLP Agreement or Partnership Agreement etc. • PAN of Directors/Proprietor/Partners • Address Proof of Directors/Proprietor/Partners • List of Directors/Proprietor/Partners • Authorisation Letter • Cancelled Cheque All these documents are required to be self-attested. ## There may be complex things that occur during the registration process which is a time-consuming and lengthy process. The legal language of these forms is complex in nature. The government Portal and its functionality are in itself quite challenging. The support of professionals and experts can save your precious business time. Our team of LAW COMPLIANCES, having expertise in all such kinds of matters, will resolve all problems pertaining to registration & compliances and will save your precious time and Money. Working Process: >Choose your Plan and Pay Securely. > Upload required document > An expert will be assigned to you for the procedure of submission of the application. > Our Expert will complete the process required for your work along with the necessary assistance over a call during business hours. BASIC PLAN: Assistance in obtaining Professional Tax Registration for less than 21 employees. Professional Tax Registration Service Fees: 10999/- including all Fees. STANDARD PLAN: Assistance in obtaining Professional Tax Registration for less than 41 employees. Professional Tax Registration Service Fees: 12999/- including all Fees. ACE PLAN: Assistance in obtaining Professional Tax Registration for MORE than 41 employees. Professional Tax Registration Service Fees: 14999/- including all Fees. Law Compliances can help you in obtaining Professional Tax Registration in 05-15 working days.** ** Time taken for Incorporation will depend on the submission of the relevant documents by the client and also approval from the CONCERNED Government authorities. FREQUENTLY ASKED QUESTIONS (FAQ): Q.Is it mandatory to pay professional tax? Yes, if you are a salaried individual, it is mandatory to pay professional tax. Q.How is Professional Tax calculated? In India, Professional Tax is calculated on Salary slabs. Under minimum salary, there is no tax. The maximum amount paid as Professional Tax is Rs.2500 per year. The tax slabs differ from state to state. Q.Who is assessed under the professional tax act? The employer is liable to pay the professional tax that is assessed under the profession tax act. Q.I am a freelance professional. Am I liable to pay Professional Tax? Yes, Professional Tax is applicable even for professionals, if income exceeds the specified limit as per your Professional Tax Laws applicable in the state where you live. ***