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Profession Tax

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About Profession Tax

Profession tax is the tax levied and collected by the state governments in India. It is a indirect tax. A person earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this professional tax. The Commercial Taxes Department is the nodal agency which collects the Profession Tax dues from professionals in the State . Different states have different rates and methods of collection. In India, profession tax is imposed every month.

However, not all states impose this tax. The states which impose professional tax are Punjab, Uttar Pradesh, Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, Jharkhand and Sikkim . Business owners, working individuals, merchants and people carrying out various occupations come under the purview of this tax.

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Profession

Profession tax is levied and collected by the Commercial Taxes Department of State Governments and majority of the Indian states are collecting this tax. It is a source of revenue for the government. The maximum amount payable per year is INR 2,500 and in line with tax payer’s salary, there are predetermined slabs. It is also payable by members of staff employed in private companies. It is deducted by the employer from their employee every month and remitted to state Commercial tax Dept. It is mandatory to pay professional tax. The tax payer is eligible for income tax deduction for this payment.

Registration Documents

It is very easy to register this type of business as very few documents are needed. The required documents include:

  • PAN card of the company
  • COI, MOA & AOA of the company
  • Labour certificate copy
  • Cancelled cheque
  • Passport size photo of all the Directors
  • List of names of the employees
  • Proof of Address(Power bill, Municipal tax bill, Sale deed copy)
  • Rental Agreement or NOC

Registration Duration

Registration of Sole proprietorship firm takes the shortest time and can be completed within a min. of 2 days. Despite registration taking the shortest time possible, this solely depends on government procedures and approvals during the time of your registration.

Registration Fee

The Government’s registration fee starts at Rs.500 while professional fees start at Rs.2500 and the variance would depend based on the type of business, number of employees and location of the business and even the requirements to be met while registering your particular business.