Professional Tax Registration - An Overview

What is Professional Tax Registration in Terms of Labour Compliance?

Professional tax refers to a direct tax that applies to the individuals that are involved in earning a specific amount of money. It can be through their employment, professional or trading. Practicing professionals refer to lawyers, doctors, teachers, and many more. Shaking hands with a lawyer dealing with professional tax registration will help in many regards.

What is the Role Played by a Professional Tax Lawyer?

Whatever is your income, as a genuine citizen of India; you are supposed to pay a premium amount as tax. It is deducted directly from your monthly salary of yours by the employer. The amount of money deducted gets directly deposited to the respective state government. Other professionals including businessmen pay the amount directly to the government.

Are you among them? If yes, then it is high time to claim a tax deduction against the amount paid in terms of tax during the respective financial year.

Who will be Collecting and Paying the Tax?

According to labor compliance in India, the rules of collection and payment of tax vary from one individual to the other. If you are a salaried employee, then deduction of tax will be the duty of your employer. In such a case, the employer requires a Registration Certificate from the concerned authority for depositing the tax.

On the other hand, self-employed individuals will carry on with their profession and need to pay the tax according to the slab decided by the government. They require obtaining a certificate of enrolment from the concerned authority of the state. Every state comprises a commercial tax department that will collect the professional tax that has been established based on income slabs.

How to Move with the Professional Tax Registration Procedure?

Employers must obtain professional tax registration within a month of employing the respective individuals. In other cases, the registration must be obtained within a month of starting their practice. In case the employer runs more than one office, then registration needs to be obtained for each office.

It is better to obey the rules of the respective states for convenience. Though it may seem to be a bit challenging for the employers in the very beginning, still the registration process must not be taken for granted. There are several software packages including RazorpayX Payroll that take due care of every activity related to payroll.

The software will carry every activity ranging from the disbursement of salary to coming across statutory compliance. It will also handle professional tax registration that varies from one state to the other for the employers, thus saving loads of time.

Who is exempted from Tax?

Fortunately, there is hardly any fixed rule for paying the professional tax. It can be paid either online or through offline mode. The rule may vary a bit from one state to the other where the business is operating. The intervals and process of filing of tax also vary from one state to the other.

Some individuals are exempted from paying any professional tax. Those individuals include the following:

  • People suffering from mental or permanent disability
  • People aged above sixty-five years
  • Members involved in the army or any auxiliary force serving in the respective state
  • Temporary workers involved in any industry including the textile industry
  • Women engaged exclusively under government agencies

These are the categories of people who are excluded from paying the tax. Some people confuse between being exempted and committing the blunder of not paying the tax. In such a situation, they may fall prey to various incidents. Though the consequences vary from one state to the other, still violation must be avoided.

It may result in a penalty, late fee, or charging of a high rate of interest for not paying any tax or for not filing returns. If this mistake occurs several times, then severe action may be taken against the respective individual.

Is it Possible for the Lump Sum Payment of Professional Tax Liability?

The facility of paying professional tax in a lump sum is permitted in a countable number of states as of now. It is expected that in the long run, this facility will be made available in almost every state. Still, it is better to have words with the respective income tax officer to have a crystal clear knowledge regarding the actual rules.

The following are some states in India where it is mandatory to go with professional tax registration:

  • Bihar
  • West Bengal
  • Karnataka
  • Telangana
  • Andhra Pradesh
  • Maharashtra
  • Tamil Nadu
  • Gujarat
  • Assam
  • Meghalaya
  • Kerala
  • Odisha
  • Tripura
  • Sikkim
  • Madhya Pradesh

Are Freelancers Liable to Enroll for Tax Registration?

This is a very common question that hovers in the minds of maximum freelancers. If you are also a freelancer, then here is the answer….

If you are carrying out any freelancing business without any employees, then you need to register to the monetary threshold. The threshold will be according to the respective legislation of the state.

A professional tax is subjected to be levied to an exemption that is provided by the respective state to certain categories. If any family member of yours is suffering from any serious type of illness like mental retardation and blindness; then you may get some rebate and sometimes exemption from tax.

Planning to register for professional tax? Why not go with MyRegistration?

What Makes MyRegistration the Right Choice?

Logging in to MyRegistration will let you complete the entire procedure of professional tax registration in a hassle-free manner. We are always ready to serve you the best in every step. From registering to filing the returns, we will provide you with the best assistance.

Even if you are not tech-savvy, need not worry! Our team of highly skilled professionals will always be in a ready state to serve you in the best possible manner. Feel free to get in touch with us by dialing our number. We will be glad to get back to you and serve in the best possible manner.

Also, you may fill the online form so that it becomes easy for our representatives to get in touch with you at the earliest.