Professional Tax Registration in Chennai
Profession Tax is a direct tax which is levied on persons earning an income by way of either practicing a profession, employment, calling or trade. Unlike income tax which is levied by the Central Government, profession tax is levied by the government of a state or union territory in India.
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Professional Tax Registration in Chennai – An Overview
Professional tax is one source of revenue for the government and is used towards bettering the services for professionals in that state. Thus, every employer needs to deduct professional tax on salary, although there are a few exemptions related to this. Professional tax in India varies from state to state.
Professional tax is calculated every month based on your gross salary for that month. Say your CTC is Rs. 50,000 per month, and after deduction of your EPF, gratuity, and leave deduction or payment towards any loan you may have taken from the company in the past, your gross salary comes to Rs. 40,000.
Benefits of Professional Tax Registration in Chennai
The Professional Tax is a source of revenue for the state governments, which helps in implementing schemes for the welfare and development of the region.
- Avoid having your account levied.
- Stop tax wage garnishment.
- Settle all your outstanding tax debt.
- Make sure you don’t get caught up in past returns
- Assist with audits
- Avoid loss of credit score due to unpaid dues
- Enjoy more peace of mind
- Protection of Assets and Income
- Helps you interpret Tax Laws
- Explains to you all the IT processes
Who is required to register?
Every person carrying on a Profession or trade and employing staff is required to register with the State professional tax authority. Employer’s responsibility would also include deducting professional tax from the employee’s salary and remitting it to the government along with filing timely Professional tax returns.
Are you here wondering if you should register for professional tax? Do you own a business that employs professionals in a private setting? Then you most definitely need to get a professional tax consultant in Chennai who can register your company.
Each and every employee needs to pay a fixed amount as professional tax, and the amount depends on the salary of the employee. Though it is payable by the employee, it is you, the employer, who needs to ensure and deduct the PT from their salaries and pay it to the government.
You need to opt for Professional tax registration in Chennai within 30 days of hiring the staff for your business or company. Failure to do so means you need to pay a penalty of Rs. 5 per day. So whether you are late or are looking to register for a new company, our consultants at Chennai Filings are at your service to ensure you a hassle-free registration process.
Documents required for Professional Tax Registration in Chennai
- Light Bill / Rent Agreement: Light Bill in case of owned shop or business premises, for any other case, a Rent Agreement is required
- PAN Card of an Individual
- Aadhaar Card of Individuals
- 2 Passport-size photos of the proprietor
- Signature on Blank Paper for record and verification
- Canceled cheque / Bank Statement
How to Register for Professional Tax in Chennai
By registering for GST, you will need to add 10% to your prices. At the same time, you will be able to claim GST credits for the goods and services you have purchased for your business. If you don’t register, you won’t be able to claim these credits.
The professional tax registration procedure varies according to the state:
The tax slab rates can vary from one state to another, where the business owner has employees in different states, so one has to get a professional tax registration for all the states.
Frequency of filing returns:
- The frequency with which one needs to file returns will depend on the state in which the person resides. Before filing a return, it’s important to know the rules of the state.
- Get registered as a payee of professional tax in a local professional tax office in that state.
- It is imperative for all the individuals and businesses that are liable for the tax payment.
- Calculate the pay of professional tax in the prescription form.
- The payment and calculations done must be audited by a chartered Accountant.
- When it comes to employees, the employer has to deduct the salaries of employees for the professional tax.
- Once the person gets registered, he is then responsible for paying Professional Tax; different professions are specified with different PT rates.
What is the process for getting Professional Tax Registration?
Filing Application in Form I and Form II of taxes on Profession
Our Expert will prepare your prescribed application and collect the documents necessary for submission
Application Submission
Once the application is prepared and the documents are collected, we will submit your application to the respective department.
Professional Tax Registration Certificate
Once the registration application and the attached supporting documents are verified by the Officer, Registration Certificate is provided.
FAQ's
Are all employers required to pay professional tax (PT)?
Professional tax is a state level tax and not a union tax. Employers coming under the jurisdiction of states which levy professional tax are required to collect PT from employees and remit the same to the government.
What are the consequences of non-registration?
Delay in obtaining Professional Tax Registration Certificate incurs a penalty of Rs. 5/- per day. In case of non/late payment of profession tax, penalty will be 10% of the amount of tax. In case of late filing of returns, a penalty of Rs. 300 per return will be imposed.
What are the procedural compliances required?
Assesses will be required to make timely payments of the PT collected and file PT returns according to the rules laid down by the respective state government.
Is registration with State department for PT mandatory?
Yes. Every employer falling under the specified criteria should mandatorily register with the state authority
In which states is professional tax applicable?
Professional tax is applicable in Karnataka, Andhra Pradesh, West Bengal, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura, Telangana and Madhya Pradesh.
How to obtain registration?
ation in Form I [See Rule 3(1)]Application for Registration ]and Form II (See Rules 4(1) and 6(2)) of tax on Professions, Trades, Callings and Employments Act, 1987 by furnishing the following details a) Address proof b) Bank account with Branch name c) firm registration certificate d) mail ID e) TIN/VAT Number.