Professional Tax Return

Overview

In many states professional tax applicable. In another word, this tax is levied by the state government like Andhra Pradesh, Gujarat, Karnataka, Kerala, Maharashtra, Telangana, and West Bengal

Profession Tax Applicability

Profession tax is applicable on the following classes of persons:

An Individual,  Hindu Undivided Family (HUF) &  Company/Firm/Co-operative Society/Association of persons or a body of individuals, whether incorporated or not

Who Pays Profession Tax?

Self-employed persons who are carrying out their profession or trade which is falling applicability of professional tax liable to pay tax the particular state government. The professional tax varies from state to state, and it is calculated on the annual taxable income of the individual, however, it can be paid either annually or monthly.

In case of employer need to take registration under the profession tax act, they are liable to deduction professional tax on salaries and wages of individual people’s o a monthly basis (as per the applicable professional tax slab) and deposit the same with the state government.

Maximum Profession Tax Amount

Rs. 2500 is a maximum amount that would be levied as a professional tax on any person per financial year.

Deductible Under Section 16 (iii) Of The Income Tax Act

Professional tax is a deduction According to Section 16 (iii) of the Income Tax Act 1961, for employers, but in the case of employees, they can is allowed as a deduction from his/her gross salary income.

Returns and payments

Amount of PTRC liability for the Due Date and Type of Return
First Year of Registration Monthly returns before the last day of the month
Less than Rs. 50,000 On or before 31st March of the particular financial year (Yearly return)
More than Rs. 50,000 On or before the last date of the month (Monthly return)

Professional Tax Registration is mandatory within 30 days from the date of employing staff in a business or, in the case of professionals, 30 days from the commencement of the practice. If the assessee has more than one place of work, then separate registration needs to take from particular the jurisdiction of that authority.

Professional tax payment :

If an employee is more than 20: make the payment within 15 days from the end of the month.

If an employee is less than 20 employees, make payment quarterly (i.e. by the 15th of next month from the end of the quarter).