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Know More About PROFESSIONAL TAX REGISTRATION
Introduction and Its Compliance
Professional Tax is a levied by state on professionals, traders and employees earning any income through any medium. Although it is termed as "Professional Tax," it not just applies to professionals like doctors or chartered accountants, but also to salaried employees and business entities. Each state has its own separate set of rules and slab rates for professional tax. In those states where it is applicable, every employer must register and deduct professional tax from the employees' salaries and deposit the same with the government. Lawfinity ensures accurate, timely registration and compliance with the respective state laws to avoid penalties and legal issues.
Why It Is Needed
Professional Tax Registration is mandatory for the employers and self-employed individuals in the states that have applicable professional tax laws. Timely registration allows businesses to deduct and remit tax legally, fulfilling their statutory obligations. Lawfinity provides proper assistance, documentation and filing processes so that the employers stay fully compliant with state tax regulations and avoid unnecessary penalties and fines.
Benefits and Advantages
- Avoidance of Penalties Professional Tax registration ensures that your business complies with applicable state laws and avoids fines, interest or prosecution for non-compliance.
- Employer’s Credibility Being a compliant employer adds to your business’s credibility, especially in formal sectors, tenders and partnerships.
- Easy Employee Deductions A registered employers can easily deduct the appropriate amount from salaries and remit it as per the state-prescribed format and frequency.
- Minimal Tax Burden The professional tax rates are nominal, generally not exceeding ₹2,500 per annum per individual, making it a small but essential statutory contribution.
- State-Wise Compliance With Lawfinity’s state-specific expertise, your registration and filing remain aligned with individual state tax requirements.
Eligibility Criteria
- Every employer having salaried employees in a state where professional tax is applicable.
- Self-employed individuals such as doctors, lawyers, consultants, freelancers, etc., depending on state norms.
- Businesses and companies operating in states like Maharashtra, Karnataka, West Bengal, Tamil Nadu, Gujarat, etc., where PT is mandatory.
- Registration is required within 30 days of employing staff or commencing operations.
Documents Required
- PAN Card of the business or applicant
- Certificate of incorporation or registration document of the business
- Address proof of the establishment
- Salary details of employees
- Employee list with designation and salary structure
- Bank details and cancelled cheque
- Identity and address proof of directors/owners
- Board Resolution or authorization letter (if applicable)
Steps for Professional Tax Registration
- Consultation & Evaluation: Lawfinity assesses the applicability of professional tax based on your business location and structure.
- Document Preparation: All necessary documents are collected and verified by the team for accuracy and compliance.
- Online Application Filing: The application is filed with the state’s Professional Tax department via the respective government portal.
- Approval and Certificate Issuance: After successful verification, the Professional Tax Registration Certificate is issued.
- Ongoing Compliance: Lawfinity assists in regular tax filings, deductions and return submissions as per due dates.
Penalties
- Delay in registration can attract a penalty ranging from ₹5 to ₹20 per day.
- Non-payment or late payment of professional tax can result in penalties ranging from 10% to 30% of the due amount.
- In extreme cases, legal action may also be initiated by the department.
- Lawfinity’s timely reminders and expert handling ensure such issues are entirely avoided.
Timelines
Standard Processing Time
The complete registration process usually takes 5 to 10 working days, depending on the respective state’s processing system and document verification.
Timelines may vary depending on document verification and government approvals.
Fee
Frequently Asked Questions
Because every great business starts with the right answers.
No, it is only applicable in specific states such as Maharashtra, Karnataka, West Bengal, Tamil Nadu, Gujarat, etc.
Employers and self-employed professionals in applicable states must register and comply with professional tax laws.
The maximum limit is ₹2,500 annually per person in most states.
Yes, professional tax paid by an individual is allowed as a deduction under Section 16 of the Income Tax Act.
You need to register separately in each state where the professional tax is applicable.
This varies by state—monthly, quarterly or annually, depending on the number of employees and turnover.
Late filing or non-filing of returns may attract interest, fines or other penalties as per state rules.
Yes, if the state requires it and their income exceeds the exempted threshold.
Absolutely. Lawfinity provides complete assistance in registration, return filing and compliance management for professional tax.
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Anil Yadav
Shaperz India Grain Private Limited
“From FSSAI to Trade License, Lawfinity handled all our approvals efficiently. One-stop solution for all licensing needs.”
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