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Professional Tax Registration

Professional Tax is a tax charged by the various Indian state governments on salaried individuals working in government or non-government organizations, or in the practice of any profession, such as CAs, Lawyers, Doctors, etc., or who carry on some type of business.

In India, professional taxes are levied at the state level. Different states have different collecting rates and procedures. It is not mandatory in every state. Assam, Andhra Pradesh, Chhattisgarh, Gujarat, Kerala, Karnataka, Madhya Pradesh, Meghalaya, Maharashtra, Odisha, Sikkim, Tripura, Telangana, Tamil Nadu, and West Bengal are among the states that levy a professional tax. The tax on professional services is subtracted from the team member’s account and is deposited to the State Government.

Professional Tax Regisration - eFiling Company

Who Pays Profession Tax?

Self-employed individuals who practice their profession or trade on their own and are subject to the professional tax must pay the tax to the state government. A state’s or union territory Commercial Taxes Department is the nodal body for collecting professional tax based on established tax slabs that differ by state and union territory. The individual pays the surcharge monthly or annually and is calculated as the annual taxable income.

Self-employed taxpayers must obtain a Certificate of Enrolment in the required manner from the authorized authority.

In the case of salaried individuals and wage earners, the employer is responsible for deducting professional tax from the team member’s compensation every month and depositing it with the state government.

Maximum Profession Tax Amount Per Financial year, any person can be levied a maximum of Rs. 2,500 professional tax.

Taxes on professions are deductible. Section 16 (iii) of the Internal Revenue Code The professional tax paid by a team member is recognized as a deduction from their gross wage income under Section 16 (iii) of the Income Tax Act 1961.