business-licenses

PROFESSION TAX REGISTRATION

Professional Tax in India

Professional Tax is a direct tax levied by the State Government on individuals earning income through employment, profession, trade, or calling. It differs from Income Tax, which is levied by the Central Government. The maximum professional tax payable per year is ₹2,500.

Who Pays Professional Tax?

Salaried Individuals: Employers deduct the tax and remit it to the State Government.

Self-Employed Professionals or Business Owners: Required to pay the tax themselves.

Note: Tax slabs and rules vary by state.

Professional Tax Registration & Compliance

Professional Tax Registration is mandatory within 30 days of employing staff or starting a professional practice.

Registration Certificate must be obtained from the respective State Tax Department.

If you have multiple offices, you must register separately in each jurisdiction where offices are located.

Exemptions from Payment of Professional Tax

The following individuals are exempt from paying professional tax:

• Parents of children with permanent disability or mental disability.
• Armed forces members including auxiliary/reserve forces under the Army Act, 1950; Navy Act, 1957; and Air Force Act, 1950.
• Badli workers in the textile industry.
• Persons with permanent physical disability, including blindness.
• Women agents under Mahila Pradhan Kshetriya Bachat Yojana.
• Parents or guardians of mentally disabled individuals.
• Senior citizens (above 65 years of age).

Benefits of Professional Tax Registration

By registering for professional tax, you can:

• Avoid legal penalties and account levies.
• Prevent wage garnishment due to unpaid dues.
• Clear outstanding tax liabilities.
• Stay up to date with past returns.
• Protect your credit score.
• Avoid audit-related issues.
• Secure your assets and income.
• Get a clear understanding of tax laws and processes.
• Build credibility and trust with customers and stakeholders.