Every business entity in Karnataka shall obtain the Certificate of Enrollment (EC) from the Profession Tax Officer within Thirty days from the date of commencement business. This registration is mandatory for business whether they employ any people in employment or not.
Also, Professional Tax Employee Registration is a must for all the employers who employ people with salary or wages of Rs.15000 /- or more. Certificate of Enrollment (EC) is must for obtaining the Certificate of Registration (RC).
Consequences of Non-Registration.
Delay in obtaining the registration or non-obtaining the registration shall attract penalties and legal consequences under Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976.
The Professional Tax department gathers information from the office of Registrar of Companies, Registrar of Partnerships, Department of Shops and Establishment and Goods and Service Tac Department, Tax department, Income Tax Department etc.
They cross check whether the newly registered Companies, LLPs, GST holders and registered Shops obtained the professional tax registration or not. If there is no Certificate of Enrollment (EC) obtained by these new businesses, the Professional Tax department shall sent a show cause notice why action shall not be taken under Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976.
Penalties and Interest under Professional Tax
1. Employer Registration or Enrolment Certificate
In case of a New business registered in the year April 2016, the following shall be the total penalties and interest as on February 2019.
| Date of Regn. | 01/04/16 | ||||
| FY | Delay | Fee | Interest | Penalty | Total |
| 2016-17 | 3 | 2500 | 1125 | 2500 | 6125 |
| 2017-18 | 2 | 2500 | 750 | 2500 | 5750 |
| 2018-19 | 1 | 2500 | 375 | 2500 | 5375 |
| Total |
| 7500 | 2250 | 7500 | 17250 |
Note:
- Yearly Fee is Rs.2500.00
- Interest is payable at the rate of 1.25% per month till the date of payment
- Penalty of an equal amount of Fee payable.
2. Employee Registration or Registration Certificate
In case of the above referred entity started employment on April 2018, the following shall be the total penalties and interest as on February 2019.
| Date of Starting Employment. | 01/04/18 | ||||||
| Date of Submn. | Feb-19 | ||||||
| Month | No. of Emp | Delay Months | PT Payable | Interest | PT Penalty | Return Penalty | Total |
| Apr-18 | 4 | 10 | 800.00 | 100.00 | 800.00 | 250.00 | 1950.00 |
| May-18 | 4 | 9 | 800.00 | 90.00 | 800.00 | 250.00 | 1940.00 |
| Jun-18 | 4 | 8 | 800.00 | 80.00 | 800.00 | 250.00 | 1930.00 |
| Jul-18 | 4 | 7 | 800.00 | 70.00 | 800.00 | 250.00 | 1920.00 |
| Aug-18 | 4 | 6 | 800.00 | 60.00 | 800.00 | 250.00 | 1910.00 |
| Sep-18 | 4 | 5 | 800.00 | 50.00 | 800.00 | 250.00 | 1900.00 |
| Oct-18 | 4 | 4 | 800.00 | 40.00 | 800.00 | 250.00 | 1890.00 |
| Nov-18 | 5 | 3 | 1000.00 | 38.00 | 1000.00 | 251.00 | 2289.00 |
| Dec-18 | 6 | 2 | 1200.00 | 30.00 | 1200.00 | 252.00 | 2682.00 |
| Jan-19 | 7 | 1 | 1400.00 | 18.00 | 1400.00 | 253.00 | 3071.00 |
| TOTAL |
|
| 5600.00 | 490.00 | 5600.00 | 1750.00 | 13440.00 |
Note:
- Amount payable per employee is Rs.200.00 per month
- Interest is payable at the rate of 1.25% per month till the date of payment
- Penalty of an equal amount of Fee payable.
- Penalty for non-filing of Return Rs.250.00 per month
Have you received a Notice from the Professional Tax Department?
If you have received a notice from Professional Tax Department either by mail or by post, you have to submit necessary document and details for registration and has to pay the penalty and interest to the department to regularize the process.
Consequences of Non – Registration / No Reply
If the department does not receive a reply with details of registration and payment, they will impose the cost and shall issue a Demand Notice with revenue recovery clause.
Received a Notice Professional Tax Department?
It is necessary to details for registration and has to pay the penalty and interest to regularize the process.