In India, all types of trades and professions are subject to professional tax. Every employee of a private firm operating in India must pay the tax. All business owners are responsible for registering for professional tax as well as paying it.
Self-employed professionals must pay the professional tax if they receive a regular monthly income. A professional is someone working in a specialized area, such as accountancy, media, etc.
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The State may impose a professional tax on income earned by profession, trade, or employment. It was first imposed in India in 1949, and the power to levy Professional Tax has been given to the State under clause (2) of Article 276 of the Constitution of India. Depending on the income of the individual, this tax is levied at different slab rates. Professional Tax registration online will provide a flexible option for the employer to comply with state authorities.
The state government collects the professional tax, as opposed to the central government, which collects Income Tax. Each State has its own professional tax rules. Since the rules differ from State to State, each State can set its limits and rates. However, the maximum amount limit has been increased to Rs.2500 per year. Various salary slabs apply to the levying of a professional tax in different states.
State taxes are nominal and structured based on a salary range, thus imposing an insignificant burden on taxpayers.
In the absence of professional tax registration, huge penalties continue to cascade over time.
Ensures compliance with state laws and keeps your business running smoothly
Depending on the professional tax paid, deductions can be claimed from salaries. You will receive a deduction for the payments made in the year that you made them.
The professional tax applies to firms, LLPs, corporations, societies, HUFs, associations, clubs, and companies. A branch involved in all of these will also be considered a separate individual under the professional tax.
Professional individuals who need to pay professional tax include legal professionals such as notaries, solicitors, physicians, managers, tax consultants, surveyors, company secretaries, chartered accountants, insurance agents, engineers, architects, and contractors.
Those serving as company directors, partners in firms, LLP partners, or designated partners should pay professional tax. As soon as they are appointed to these roles, they should register under the professional tax act.
By registering on the government's portal, the company/firm must obtain a professional tax enrollment certificate (PTEC) within 30 days of incorporation.
30 days from the day they hire a new employee, the company/firm must get a professional tax registration certificate (PTRC). The employer is required to deduct professional tax from each employee's salary and submit it to the professional tax department with the return.
ID proof of Director/ Partner/ Proprietor
Address proof of Director/ Partner/ Proprietor.
Shop and Establishment Certificate(if any)
Passport size photograph of the Director/ Partner
MoA & AoA (if applicable ) with Incorporation Certificate
PAN Card of Director/ Partner/ Proprietor
Salary details of employees
Cancelled Cheque and Bank Statement (as applicable)
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