Professional Tax Registration

What is Professional Tax?

Professional tax is a tax that is imposed by the State government on all salaried individuals. A person earning income from salary or professions such as Chartered Accountants, Company Secretaries, Lawyers, etc. is required to pay professional tax. Professional tax is levied on all types of trades and professions in India. It has to be paid compulsorily by every staff member who is employed in any private firm operating in India.

Professional Tax Registration

Professional tax registration is the onus of every business owner, who must take up responsibility for deduction of professional tax and payment for the same. Being a State based registration, the rate of tax and method of registration differs.

Exemptions from Professional Tax

Following individuals are exempted from paying professional tax:

  • Parents of children suffering from mental or permanent disability.
  • Members of the armed forces including members of auxiliary forces/reservists, serving in a particular state.
  • Individuals with permanent physical disability 
  • Individuals over the age of 65.
  • Badli workers engaged in the textile industry
  • Women engaged exclusively as an agent under the Directorate of Small Savings or Mahila Pradhan Kshetriya Bachat Yojana.

Benefits of paying Professional Tax

Compliance Norms

Professional Tax is a judicial requirement. Hence it makes your business/ profession legally compliant.

Avoiding Penalties:

Safeguards both employer and employee from paying of heavy penalties.

Easy compliance with nominal payment:

Following of norms is quite simple, with collected amount of professional tax per annum having an upper cap of Rs. 2500 per annum.

Documents Required

ID Proof (Self-attested copy of ID proof of Proprietor/ Partner/ Director)

Address proof (Self-attested copy of address proof of Proprietor/ Partner/ Director;  Shop and Establishment Certificate(if any ))

Photographs (3 copy of passport size photograph of the Proprietor/ Partner/ Director)

Incorporation Documents (MoA – AoA of Company, Partnership Deed/ LLP Agreement, etc. along with the registration  certificate, if any)