Professional Tax Registration in short PT Registration or PTR is a registration that needs to take by the employers in India. PT registration is mandatory in most of the states in India.
Every employer is liable to deduct the Professional tax from their employee’s salary and file it with the government.
Under the Professional Tax Regulations, an employer must obtain TWO registrations depends on the status of whether there are people employed by the business or not.
1. Professional Tax Employer Registration - Certificate of Enrolment (EC):
Every business entity must get the Employer Registration - Certificate of Enrolment (EC). Within 30 days from the date of commencement of business. This registration is mandatory for business whether they employ any people in employment or not.
2. Professional Tax Employee Registration - Certificate of Registration (RC):
Every employer liable to Professional Tax on behalf of their employees must get Employee Registration Certificate. Within 30 days of his becoming liable to pay tax.
Professional Tax Employee Registration is a must for all employers; Who employ people with salary or wages. Certificate of Enrolment (EC) is a must for obtaining the Certificate of Registration (RC).
Now let’s discuss in detail about the Professional Tax
1. Who is eligible to pay the Professional Tax?
Professional Tax is imposed on salaried individuals, practicing professionals, working in government and non-government entities, persons who carry out some form of business.
2. Who are exempted from paying professional tax?
- Any person who is suffering from a permanent physical disability
- Parents and guardians of a person who is suffering from mental health issues.
- Persons of age 65 years or above.
3. Who is responsible to pay professional tax?
- In case of individuals who are self-employed the tax has to be paid by the individual himself
- In case of employed individuals, the liability is on the employer
4. What if an employer has different offices in different states of India?
If the employer has different offices in different states of India. They will need to take Professional Tax Registration in those particular states.
5. When does the employer have to pay the professional Tax?
- If the employer has less than 20 employees, they need to make the payment of professional tax quarterly of the financial year.
- If the employer has more than 20 employees, they need to make the payment of professional tax within 15 days from the end of the month.
6. What if the employer does not get PTR or pay professional tax on time?
- Delay in Registration of professional tax penalty levied by most states Rs 5 per day.
- Delay in payment of professional tax penalty levied by most states 10% of the amount of tax
- Delay in filing of return of professional tax Rs 1000 per return delay by 1 month and Rs 2000 per return for further delay.
7. What are the states that impose a professional tax?
Here is a list of Indian states and territories impose a professional tax
- Andhra Pradesh
- Madhya Pradesh
- West Bengal
- Tamil Nadu
These are the Indian states and territories which impose professional tax
8. What are the states that do not impose a professional tax?
Here is a list of Indian states and territories that do not impose a professional tax
- Arunachal Pradesh
- Himachal Pradesh
- Uttar Pradesh
- Andaman & Nicobar
- Dadra & Nagar Havelli
- Daman & Dui
These are the Indian states and territories which do not impose professional tax
Professional Tax Applicability in India
Professional tax is a tax levied by the State Government. All states do not impose this tax, only some of them collect the tax. This tax is a source of revenue for the states who impose it.