Professional Tax

Professional Tax is a State level tax and is applicable to salaries of employees and professionals like Chartered Accountants, Lawyers, and doctors, etc.

Professional tax is a state-level tax and is levied across trades and professions in the country. As soon as a business owner hires new staff, it is the responsibility of the owner to deduct and pay this tax to the relevant government department. This tax is also applicable to persons who are not salaried employees but have a professional income of their own such as doctors, lawyers, and chartered accountants. This tax is based on the gross income of an individual and is calculated slab-wise with a capping of Rs. 200 per month. The states in which this tax is levied are Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura, and Madhya Pradesh.

Grounds for obtaining Professional Tax Registration

• State-level tax – State-level authorities are mandated by law to collect this tax from persons in trade, employment or professions.

• Statutory requirement – Depending on the state, this tax registration is mandatory for employers, along with deduction and payment of tax on the employee's behalf.

• Penalties – Failure to pay this tax or to obtain this tax registration could result in levying of penalties.

• Tax deduction – A professional taxpayer can claim salary deduction on the amount of tax paid.

Documents Required For Professional Tax Registration

Professional tax registration is a state subject, document requirement differs from state to state. General (illustrative) list of the documents required is given below:

For Individual:

• Self-attested copy of PAN card (mandatory).

• Aadhar card of Proprietorship.

• Proprietorship Bank account statement and canceled cheque.

• Passport size photograph of the proprietor.

• Attendance and salary register.

• Proprietors’ consent for the application.

• Authorization letter.

Proprietors’ Identity Proof:

• Self-attested copy of PAN card (Mandatory)

• Passport; or

• Aadhar card; or

• Voter ID; or

• Driving license

Proprietor address proof:

• Self-attested copy of Telephone/Mobile or Electricity bill; or

• Bank Account Statement (Less than 2 months old)

Proprietorship Address Proof:

• Telephone/Mobile/Electricity/Gas bill (Less than 2 months old); AND

• In case of rented premises a notarized copy of Rent Agreement with a No-Objection Certificate (NOC) for conducting business;

• In the case of self-owned premises registered title document

For LLP (Limited Liability Partnership)/Partnership

• Copy of LLP PAN card attested by Designated Partner of LLP or Partner of Partnership firm

• Aadhar card of Partners

• LLP Agreement/Partnership Deed

• CoI of LLP or Registration of Partnership

• LLP Partners’ names

• Attendance and salary register

• Partners’ consent for the application

• Authorization letter

• LLP/Firm Bank account statement and canceled cheque

• Passport size photograph of all directors/Partners

Partners’ Identity Proof:

• Self-attested copy of PAN card (Mandatory)

• Passport; or

• Aadhar card; or

• Voter ID; or

• Driving license

Partners’ address proof:

• Self-attested copy of Telephone/Mobile or Electricity bill; or

• Bank Account Statement (Less than 2 months old)

LLP/Firm Address Proof:

• Telephone/Mobile/Electricity/Gas bill (Less than 2 months old); AND

• In case of rented premises a notarized copy of Rent Agreement with a No-Objection Certificate (NOC) for conducting business;

• In the case of self-owned premises registered title document

For Companies

• Copy of Company PAN card attested by the company director.

• Company Aadhar card.

• CoI (Certificate of incorporation).

• MoA/AoA.

• Board resolution duly signed.

• Attendance and Salary register.

• List of directors.

• Company Bank account statement and canceled cheque.

• Authorization letter.

• Passport size photograph of all directors.

Company Directors Identity Proof:

• Self-attested copy of PAN card (Mandatory)

• Passport; or

• Aadhar card; or

• Voter ID; or

• Driving license

Address Proof:

• Self-attested copy of Telephone/Mobile or Electricity bill; or

• Bank Account Statement (Less than 2 months old)

Company Address Proof:

• Telephone/Mobile/Electricity/Gas bill (Less than 2 months old); AND

• In case of rented premises a notarized copy of Rent Agreement with a No-Objection Certificate (NOC) for conducting business;

  • In the case of self-owned premises registered title document.