Professional Tax Registration

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    What is Professional Tax (P Tax) ?

    It is a direct tax. Profession tax is the tax levied and collected by the state governments in India. A person earning an income from salary or anyone practising a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this professional tax. This is a tax that is to be paid by every single earning individual. 

    Who is required to get Professional Tax Registration?

    Every employer is responsible for deducting professional tax from the salary of employees and depositing it to the state government. For this purpose, every employer is to get a “Professional Tax Registration Certificate” (PTRC) from the state government within 30 days from the date of liability to deduct and pay professional tax.
    Every trader or professional is not only liable to deduct and pay professional tax from the salaries of employees but also deposit professional tax on their own income. For this purpose, they are required to obtain a “Professional Tax Enrollment Certificate” (PTEC). We may identify the following categories of traders & professionals liable for registration:
    • Companies
    • Firms
    • LLPs
    • Corporation
    • Societies
    • HUF
    • Associations
    • Clubs
    • Legal practitioners such as solicitors
    • Contractors
    • Architects
    • Engineers
    • Insurance agents
    • Chartered Accountants
    • CS
    • Surveyors
    • Tax consultants
    • Management consultants
    • Medical representatives such as doctors, medical consultants, and dentists

    Exemption From Professional Tax

    • Individuals who run educational institutions that teach classes up to twelfth standard.
    • Individuals in the Central Para Military Force (CPMF).
    • An individual who has one child and has undergone a sterilization operation. However, the relevant documents must be submitted.
    • Any ex-serviceman who comes under SI No.1 (Schedule)
    • Any handicapped individual who has at least a 40% disability. However, the relevant certificate must be submitted.
    • Individuals who have a permit for a single three-wheeler or a single taxi to carry goods.
    • Deaf, dumb, and blind individuals who are earning a salary.
    • Civilian non-combatant and combatant members who are part of the Armed Forces. However, the Army Act must govern the Armed Forces.
    • Foreign technicians who have been employed by the state.
    • All philanthropic and charitable hospitals that are present in places that come under below taluk level.

    States where Professional Tax is Applicable

    Not all states impose a professional tax. The states which impose professional tax are Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Meghalaya, Orissa, Sikkim, Tamil Nadu, Telangana, Tripura & West Bengal. Different states have different rates and methods of collection. Professional tax is imposed every month. However, the amount of professional tax cannot be more than Rs. 2,500.

    Interest/Penalty for Non-Compliance

    A penalty may be imposed by the state government: –

    • if you delay in obtaining the Registration certificate
    • for a delay in making the payment
    • for a delay in filing a return

    The amount of interest or penalty for defaults varies from state to state. All states shall charge a penalty for non-registration for professional tax, if applicable. Further, penalties may be charged for non-deposit of tax timely or failure to file returns timely.

    Documents Required

    1. Incorporation documents- Incorporation Certificate of Company/LLP, Partnership deed/ LLP agreement, Trust Deed

    2. MOA/AOA of company, Byelaws of Trust

    3. Address Proof of entity- Lease Deed/Rent Deed (if rented), Property Tax Receipt/Registry copy (if owned)

    4. Utility bill of office premises- Water bill/Electricity bill/Telephone bill

    5. PAN card of the entity duly attested

    6. Shop & Establishment Act Certificate, if available

    7. 3 passport size photograph of proprietor/partners/directors/karta

    8. ID Proof of proprietor/partners/directors/trustees/karta- PAN & Aadhar Card

    9. Address proof of proprietor/partners/directores/trustees/karta- Passport/Aadhar/Driving license/voter Id

    10. Board Resolution/ consent letter authorizing the director or partner

    11. Cancelled cross cheque and bank statement copy

    12. Salary Register of employees

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