Professional tax is a tax that is levied on all kinds of professions, trades, and employment on the basis of such income. It is imposed by the state government in India.
Each professional whether the Directors of the company , partners of LLP or any other employer is under the obligation to have professional tax registration and to ensure that it must be deducted from the salary of employees. And this deducted tax is deposited in the appropriate office designated by the state government and a return of the professional tax must be filed specifying the payment of professional tax.
The registration process of professional tax varies from state to state.
It is important to know the rules of the state before filing for a return because it depends on the state the person lives in.
This tax is levied on all types of business entities. Delay in obtaining professional tax can lead to a penalty. In case of late payment of professional tax the penalty will be 10% of the amount of tax.
The maximum amount payable p.a. towards this tax is INR 2500. This tax is usually a slab amount based on the gross income of the professional.
The owner of a business is responsible for deducting professional tax from the salaries of his employees and paying the amount to the appropriate government department in the prescribed form within the specified time.
Within first working day, you need to provide your PAN details, address proof and identity proofs of all the directors/partners/proprietors of the company.
On second working day the application form for professional tax will be filled by the employees and then submitted to the concerned authorities.
Within seven working days the basic acknowledgment will be given to you. In case the documents are complete, then the registration hard copy will be issued within 10 days in all major cities. Otherwise you need to submit your documents if missing as mentioned by authorities.
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