Asktrix

Guide to Professional Tax Return Filing

Professional tax is a state-level tax levied on professionals and salaried individuals in India. It is governed by respective state governments and varies from state to state. Asktrix provides comprehensive support for professional tax registration, filing, and compliance across all Indian states.

Governing Act & Legal Rules

Professional tax is governed by various state-specific acts and rules:

  • Maharashtra Professional Tax Act, 1975: Governs professional tax in Maharashtra
  • Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976: Applicable in Karnataka
  • West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979: For West Bengal
  • Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987: Applicable in Andhra Pradesh
  • Gujarat Professional Tax Act, 1976: Governs professional tax in Gujarat

Common Professional Tax Filing Errors

  • Late filing of returns and payment of tax
  • Incorrect calculation of tax amount based on salary slabs
  • Non-registration of new employees within prescribed time
  • Failure to deduct professional tax from employee salaries
  • Incomplete or incorrect information in returns
  • Missing deadlines for annual returns

Eligibility for Professional Tax Registration and Filing

For Employees:

  • Salaried individuals earning above the exemption limit
  • Employees working in companies, firms, or organizations
  • Government employees (varies by state)

For Professionals:

  • Chartered Accountants, Lawyers, Doctors, Engineers
  • Consultants and freelancers
  • Business owners and traders

For Employers:

  • Companies with employees
  • Partnership firms
  • Proprietorship concerns
  • Any organization employing staff

Professional Tax Rules and Sample Calculation

Professional tax is calculated based on monthly salary/wages. The tax amount varies according to different salary slabs defined by each state government. The tax is deducted monthly from the salary and paid to the state government.

State-wise Professional Tax Slab Rates

Professional tax rates vary significantly across different states in India. Each state has its own slab structure and tax rates.

Example Calculation in Maharashtra

  • Salary up to ₹5,000: No tax
  • Salary ₹5,001 - ₹10,000: ₹150 per month
  • Salary ₹10,001 - ₹15,000: ₹175 per month
  • Salary above ₹15,000: ₹200 per month

Step-by-Step Process for Tax Return Filing

Our streamlined process ensures quick and hassle-free professional tax return filing:

1

Register for Professional Tax

Obtain professional tax registration certificate from the state commercial tax department. This is mandatory for employers and self-employed professionals.

2

Maintain Payroll and Income Records

Keep detailed records of employee salaries, professional tax deductions, and payment schedules. Maintain proper documentation for audit purposes.

3

File Professional Tax Returns

Submit monthly/quarterly returns as per state requirements. Include details of employees, salary slabs, and tax calculations. File annual returns before the due date.

4

Payment of Professional Tax

Make timely payment of professional tax to the state government. Ensure payment is made before the due date to avoid penalties and interest charges.

Professional Tax State-wise Slab and Due Dates

State Periodicity Slab Amount to be Paid Deadline for Registration/Return
Andhra Pradesh Monthly Above ₹15,000 ₹200 20th of every month
Assam Yearly Above ₹10,000 ₹2,500 31st December every year
Bihar Monthly Above ₹10,000 ₹200 15th of every month
Chhattisgarh Monthly Above ₹15,000 ₹200 20th of every month
Gujarat Monthly Above ₹12,000 ₹200 30th of every month
Haryana Monthly Above ₹10,000 ₹200 15th of every month
Himachal Pradesh Yearly Above ₹5,000 ₹1,000 31st March every year
Jharkhand Monthly Above ₹10,000 ₹200 20th of every month
Karnataka Monthly Above ₹15,000 ₹200 20th of every month
Kerala Monthly Above ₹10,000 ₹200 15th of every month
Madhya Pradesh Monthly Above ₹15,000 ₹200 20th of every month
Maharashtra Monthly Above ₹15,000 ₹200 20th of every month
Meghalaya Yearly Above ₹5,000 ₹1,000 31st March every year
Mizoram Yearly Above ₹5,000 ₹1,000 31st March every year
Nagaland Yearly Above ₹5,000 ₹1,000 31st March every year
Odisha Monthly Above ₹10,000 ₹200 20th of every month
Punjab Monthly Above ₹10,000 ₹200 15th of every month
Rajasthan Monthly Above ₹15,000 ₹200 20th of every month
Tamil Nadu Monthly Above ₹15,000 ₹200 20th of every month
Telangana Monthly Above ₹15,000 ₹200 20th of every month
Uttar Pradesh Monthly Above ₹10,000 ₹200 15th of every month
Uttarakhand Monthly Above ₹10,000 ₹200 15th of every month
West Bengal Monthly Above ₹10,000 ₹200 20th of every month

Benefits of Professional Tax Compliance

  • Avoid penalties and legal consequences
  • Maintain good standing with state authorities
  • Ensure smooth business operations
  • Build credibility with employees and stakeholders
  • Comply with statutory requirements

Penalties and Consequences for Non-Compliance

  • Late filing penalty: ₹100-500 per month
  • Interest on delayed payment: 1-2% per month
  • Prosecution under state tax laws
  • Business license cancellation
  • Difficulty in obtaining government contracts

Example of Professional Tax Calculation and Filing

Scenario: A company in Maharashtra with 50 employees earning ₹20,000 per month each.

  • Professional tax per employee: ₹200 per month
  • Total monthly professional tax: ₹200 × 50 = ₹10,000
  • Annual professional tax: ₹10,000 × 12 = ₹1,20,000
  • Due date: 20th of every month

Documents Required for Professional Tax Return Filing

  • Professional tax registration certificate
  • Employee salary details and PAN cards
  • Monthly payroll records
  • Bank payment challans
  • Previous year's returns (if applicable)
  • Audit reports (if required)
FAQ

Frequently Asked Questions

Find answers to common questions about professional tax registration, filing, compliance, and state-specific requirements.

What is professional tax?

Professional tax is a state-level tax levied on professionals and salaried individuals. It varies from state to state and is deducted monthly from salaries or paid annually by self-employed professionals.

Which states require professional tax?

Professional tax is applicable in states like Maharashtra, Karnataka, West Bengal, Andhra Pradesh, Tamil Nadu, Gujarat, and others. Not all states levy professional tax.

Who needs to pay professional tax?

Salaried employees earning above the exemption limit, self-employed professionals, and employers are required to pay professional tax as per state regulations.

What is the maximum professional tax limit?

The maximum professional tax that can be levied is ₹2,500 per annum as per Article 276 of the Indian Constitution. However, rates vary by state.

How is professional tax calculated?

Professional tax is calculated based on monthly salary slabs defined by each state. The tax amount varies according to different income brackets.

What are the due dates for professional tax filing?

Due dates vary by state. Generally, monthly returns are due by 15th-20th of the following month, and annual returns by March 31st or December 31st depending on the state.

What happens if I don't pay professional tax?

Non-payment attracts penalties, interest charges, and legal consequences. It can also affect business operations and compliance status.

Can professional tax be claimed as deduction?

Yes, professional tax paid can be claimed as a deduction under Section 16(iii) of the Income Tax Act while calculating taxable income.

Is professional tax applicable to freelancers?

Yes, freelancers and self-employed professionals are also liable to pay professional tax as per state regulations, usually on an annual basis.

How does Asktrix help with professional tax compliance?

Asktrix provides comprehensive professional tax services including registration, monthly/quarterly return filing, payment processing, compliance tracking, and expert guidance across all states.

Professional tax compliance is essential for maintaining legal standing and avoiding penalties. Asktrix ensures seamless compliance with state-specific requirements, providing expert guidance and timely filing services.

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