Professional Tax

Are you a self employed professional? Or you have employed people? Get Professional tax certificate with Fiancy Anzalist

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Package Inclusions –
  • Issue of Enrolment/ Registration Certificate
  • Documented Follow-up
  • Business hours -CA support
  • Does not include PT payment

Professional Tax Registration & Compliance Filing

Professional Tax is a tax levied on professions and trades in India. It is a state-level tax and has to be compulsorily paid by every staff member employed in private companies. The business owner is responsible for deducting professional Tax from his employees' salaries and paying the amount collected to the appropriate government department.

Professional Tax is usually a slab amount based on the gross income of the professional. It is deducted from income every month. Some of the state governments have levied professional Taxes, and others didn't. Professional Tax is a state-imposed tax and is imposed on income earned by employees on rendering their services. Financy Anzalist Expert will help you get registered under Professional Tax without leaving the comfort of your home.

  • Purchase of Plan
  • Upload documents on vault
  • Filing of enrolment/registration application
  • Receipt of enrolment certificate

Documents Required

  1. Name, Contact Number and Email Id of Stakeholder.
  2. Self Attested PAN, Aadhar & Passport size photo of Stakeholder.
  3. Specimen Signatures of Stakeholder.
  4. Latest Electricity Bill/Landline Bill of Registered Office.
  5. NOC from owner of registered office. (If Owned)
  6. Rent Agreement from Landlord. (If Rented/Leased)
  7. PAN, TAN, COI of the Business Entity
  8. Cancelled Cheque in business name 


What is Professional Tax – Meaning, Rates & Compliance’s

Salaried employees should know ‘professional tax’ as it would have been mentioned in the payslips/Form 16. But they may or may not understand what it is and why it appears in their Salary slips as a deduction from their salary income. Hence, this article attempts to provide a better picture of ‘Professional tax’ and why it is deducted and is only the salaried class who are bearing it.

In this article, we will discuss the following topics:

??1. What is Professional tax and who levies it?

The terminology ‘Professional tax’ does not convey the meaning. Unlike the name, it is just not levied on professionals only. It is a tax on employment such as professions, trades, and job work. Professional tax is based on the income of professional, trader and job work or contractual people employed. Professional Tax (P.T) also encompasses freelancers, professionals, etc., depending on minimum income criteria. The state can make laws only for the Concurrent and State list. State Government is empowered to make laws for professional tax. However, professional tax is an income tax is levied by State Government (not all states in the country chose to charge professional tax).

Professional tax(P.T.) is a deductible amount for the Income-tax Act, 1961 and can be deducted from taxable income.

??2. Professional Tax Rate


Professional tax being levied by the State Government, is different in different states. Every state has its own laws and regulations to govern professional tax of that particular state. However, all the states do follow slab system based on the income to levy professional tax.

Further, Article 276 of the Constitution which empowers the State Government to levy professional tax also has provided for a maximum cap of Rs 2,500 beyond which professional tax cannot be charged on any person.

Few illustrative slabs in the country

Professional tax rate slabs in Karnataka

Monthly salary/wage upto Rs 15,000NIL
Monthly salary/wage > Rs 15,000Rs 200 per month


Professional tax rate slabs in Andhra Pradesh

Monthly salary/wage upto Rs 15,000NIL
Monthly salary/wage between Rs 15,001 – Rs 20,000Rs 150 per month
Monthly salary/wage > Rs 20,000Rs 200 per month

??3. Who is responsible to collect and pay professional tax?

Professional tax is collected by the Commercial Tax Department. The commercial tax department of the respective states collect it which ultimately reaches the fund of municipality corporation.

Person responsible to pay professional tax

In employees cases, an employer is responsible for deducting and paying professional tax to the State Government. If any, this payment is subject to the monetary threshold provided by the respective State’s legislation. Additionally, an employer is also required to pay professional tax on his trade/profession. Thus, the employer needs to register and obtain both viz. 

  1. A professional tax registration certificate to pay professional tax on his trade/profession
  2. A Professional tax enrolment certificate for deducting the taxes from his employees and paying to the State. Furthermore, separate registration might be required for each office depending on the respective State’s legislation.

Persons carrying on freelancing business without any employees are also required to register themselves under P.T. Act subject to the monetary threshold.

However, a professional tax levy is subject to the exemption provided by the respective State to specific categories. For example, parents or guardians of any person who is suffering from mental retardation, blind persons are exempted, among others, from the levy of Karnataka Professional tax.

??5. Consequences of violation of professional tax regulation

While the actual amount of penalty or penal interest may depend on the respective State’s legislation, a penalty may be levied by all such states for not registering once professional tax legislation becomes applicable. Further, there are also penalties for not making the payment within due date and also failing to file the return within the specified due date.

For example: In the State of Maharashtra Rs 5/day is imposed as a penalty for delay in registration, Interest @ 1.25% per month of delay in payment, a penalty of 10% of the amount of tax in case of delay/non payment of professional tax, Rs 1000 – Rs 2000 penalty for delay in filing the return

??Frequently Asked Questions:

Q. What is professional tax and when is it levied?
Professional tax is a state level tax which is imposed on income earned by way of profession, trade, calling or employment. The tax is based on slabs depending upon income of individual who may be self employed or working as employee of an entity. At present the maximum tax that can be imposed is restricted to is Rs. 2,500/-.
Q. Is there any exemption from PT payment?
Every state has its own governing provisions and exemption criteria. For example Karnataka PT act, has given exemption to certain persons from payment of PT. All charitable and philanthropic hospitals or nursing homes situated in places below the Taluk level in all districts of the State except Bangalore and Bangalore Rural District. Directors of Companies registered in Karnataka and nominated by the financing agencies owned or controlled by the State Government or by other statutory bodies. Foreign technicians employed in the State provided their appointments are approved by the Government of India for the purpose of exemption from payment of income tax for the said period ( exemption is for a period of 2 years from the date of their joining duty). Combatant and civilian non combatant members of the Armed Forces who are governed by the Army Act, the Navy Act and the Air Force Act. Salaried or wage earning blind persons. Salaried or wage earning deaf and dumb persons. Holders of permits of single taxi or single three wheeler goods vehicle. Institutes teaching Kannada or English Shorthand or Typewriting. A Physically handicapped person not less than 40% of permanent disability (subject to production of certificate from the HOD of Government Civil Hospital). An ex-serviceman not falling under Sl No.1 of the Schedule. A person having single child and who has undergone sterilization operation, subject to production of a certificate from the District Surgeon, Government Civil Hospital, for having undergone such operation. Central Para Military Force (CPMF) Personnel. Persons running educational institutions in respect of their branches teaching classes up to twelfth standard or pre-University Education. No tax is payable by persons who have attained age of sixty five years. Also no tax is payable for holding any Profession for less than 120 days in the year. Our experts will guide on on applicability of the provisions.
Q. Is Professional tax imposed in every state in India?
Professional tax is imposed only in following States: Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamilnadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, and Sikkim.
Q. Can the professional tax liability amount be paid in lump sum?
In certain states there is concept of composition scheme. For e.g. in case of Maharashtra, the government announced composition scheme under which any person liable to make payment to government at rate of Rs. 2500 may make a lump sum payment in advance of Rs. 10,000 and his liability to pay for 5 years will be discharged.
Q. What will be the other costs in the registration process?
The plan price covers all professional fees and convenience charge. Since Professional tax is state level tax the applicable govt. charges vary from state to state.
Government charges will be charged on actual basis..
Q. Which are the specific cities where the service will be delivered?
The service is state specific in case you need a shop license and will be rendered only in specific cities being Mumbai, Gurgaon, Hyderabad, Kolkata, Jaipur, Surat, Bangalore, Chandigarh, Pune and Delhi.
Q. Who is responsible for deducting the tax and depositing the same with Government?
???? In case of individuals who are self employed the tax has to be paid by the individual himself.
???? In case of employed individuals, the liability is on the employer.
Q. What is enrolment certificate and what is registration certificate?
Every employer in specific states is required to deduct taxes from salary when paid to one or more employees when payment made exceeds Rs.5,000/- (this limit is for Maharashtra) and deposit with state government. That entity is required to obtain registration certificate. When person is employed in profession by two or more employers and is getting salary/wages exceeding Rs.5,000/- but employer is not deducting professional tax then the individual needs to get enrolment certificate from authority.
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