Professional tax is linked to the employees of a company. Basically depending upon their income, a very small amount is to be deducted each month from their salary and at the end of the financial year; the collected professional tax amount has to be paid to the concerned tax authorities.
All companies in India even if they have a single employee would have got itself register for professional tax. This holds true for local owned and foreign owned companies as well as either incorporated or non-incorporated companies such as a sole-proprietorship. Professional tax registration is obligatory only if you have employed any person for your business concern.
Just as matters and procedures related to India, professional tax registration could differ depending upon location of such company. Hence companies in India need to find out whether their state requires professional tax registration or not. If they do, companies need to ensure that those taxes are paid on time every year. Applying for a professional tax number is a onetime process and when they are issued their registration certificate along with a unique professional tax number, the same is to be quoted while submitting the requisite tax amount at the end of each financial year.
Professional Tax - From point of view of an Employee
As far as employees' are concerned, the professional tax deducted by their employers or paid by employees themselves, is fully deductible from their income.
Applicability of Professional Tax
In India, the professional tax is imposed at the state level. However, not all the states impose this tax; the following states impose this levy in India - Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamilnadu, Gujarat and Madhya Pradesh. Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax.
Professional tax is levied by particular Municipal Corporations and majority of the Indian states impose this duty. It is a source of revenue for the government. It is paid by every member of staff employed in private companies. It is subtracted by the employer each month and sent to the Municipal Corporation. It is compulsory just like income tax.
How we can help?
GKS consulting Pvt. Ltd. can help you in ascertaining the applicability of Professional tax for your organization and accordingly apply for registration for the same. We can also help you in paying the Professional Tax to the government in the manner prescribed by the State legislations and provide consultancy regarding any other matters associated with the professional tax to your satisfaction.