Professional Tax - Employee

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Professional Tax Employee Registration or Registration Certificate (RC) is mandatory for every Business who employ people with salary or wages of Rs.15000 /- or more.

Professional Tax - Employee

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Professional Tax Employee Registration


Profession Tax (PT) is a tax levied on the employment and Profession by respective State Government in India. In Karnataka, Profession Tax is levied under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976. Under the provision of the Act, Profession Tax shall be paid by every person exercising any Profession or calling or is engaged in any trade or holds any appointment, public or private as specified in the Schedule to the Act.

Professional Tax is payable by the following ‘PERSONS’ (Individuals and Business Entities) engaged in any Profession, trade, callings or employment in the State of Karnataka:

A. Employers (Business Organisations)

  • Sole Proprietor
  • Partnership Firm (Registered / Unregistered)
  • Limited Company (Private / Public)
  • Limited Liability Partnership
  • Corporations and Corporate Bodies
  • Hindu Undivided family (HUF)
  • Trust / Society / Club / Association.

B. Employees

  • Employees with Salary/Wage of Rs.15000 /- or more

There are two components to Professional Tax.

1. Professional Tax - Employer

Every business is assumed as employer. Every business establishment must obtain the Professional Tax - Employer Registration / Enrolment Certificate (EC) within 30 days of commencement of business. The employer must pay professional tax of Rs.2500.00 to the Government annually.

2. Professional Tax - Employee

Every employee whose income is Rs.15000 or more is liable to pay professional tax of Rs.200 per month. The employer is liable to pay this amount to the government deduct this amount from the salary of the employee.

Professional Tax Employee Registration - Certificate of Registration (RC)

Tax payable under this Act by the employee shall be deducted by his employer from the salary or wage of the employee before making the payment of salary to employee and such employer shall be liable to pay tax to the Government on behalf of all such employees.

Every employer liable to Professional Tax on behalf of their employees must obtain a Certificate of Registration (RC) with in thirty days of his becoming liable to pay tax (starting employment of people).

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).

Process of Professional Tax Employee Registration


Business Registration / Incorporation

Register the Business as Proprietorship /Partnership / Limited Liability Partnership or Private Limited Company

Obtain Professional Tax Employer Registration (Enrolment Certificate)

Professional Tax - Employer Registration / Enrolment Certificate (EC) is required to be obtained within 30 days of commencement of business.

Application for Professional Tax Employee Registration

A business that has obtained Employer Registration (Enrolment Certificate) only can apply for Employee Registration, Every employer is liable to Professional Tax Employee Registration with in thirty days of starting employment of people with salary of Rs..15000 or more

Obtaining Certificate of Registration (RC)

After submission of application, submit the supporting of documents to Depart and obtain the Certificate of Registration (RC)

Requirements


Mandatory Registration

Every employer is liable to Professional Tax Employee Registration with in thirty days of starting employment of people with salary of Rs..15000 or more

Deduction of Professional Tax

Employer to deduct the professional tax of Rs.200.00 from employee per month and pay to Government

Monthly Payment of Tax and Filing Return

Employer to pay the deducted professional tax to Government every month and file a return of payment.

Documents Required


Enrolment Certificate

  • Professional Tax Enrolment Certificate (EC) of Employer

Business Registration Documents

  • Incorporation / Registration Certificate

  • Company PAN Card

  • MOA & AOA of Company or LLP Agreement or Partnership Agreement etc

  • Cancelled cheque – Current Account of Business

  • Business premises address proof- Electricity bill / Tax Receipt or valid rental agreement in the name of the company & Electricity bill copy in the name of the owner.

  • Last Balance Sheet, if any

  • Authorisation Letter

Directors / Promoters

  • PAN card of all Directors/ Promoters

  • Address Proof of all Directors/ Promoters

  • List of Directors/ Promoters

Employee Details

  • List of Employees and their date of appointment

  • Salary Statement

7999


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FAQ

Frequently Asked Questions on Professional Tax - Employee

What is Professional Tax?

What is Professional Tax?

Who must Pay Professional Tax?

Professional Tax is payable by the following ‘PERSONS’ (Individuals and Business Entities) engaged in any Profession, trade, callings or employment in the State of Karnataka:

A. Employees

- Employees with Salary/Wage of Rs.15000 /- or more

B. Employers (Business Organisations)

1. Sole Proprietor

2. Partnership Firm (Registered / Unregistered)

3. Limited Company (Private / Public)

4. Limited Liability Partnership

5. Corporations and Corporate Bodies

6. Hindu Undivided family (HUF)

7. Trust / Society / Club / Association.

Who is responsible for deducting Professional Tax?

Every business establishment (Employer) liable to pay Professional Tax on annual basis and every employee whose income is Rs.15000 or more is liable to pay professional tax of Rs.200 per month. Tax payable by the employee shall be deducted by his employer from the salary or wage of the employee before making the payment of salary to employee and such employer shall be liable to pay tax to the Government on behalf of all such employees.

When the business has to obtain Professional Tax Employee Registration ?

The Registration need to be taken within 30 days of he is becoming liable to pay professional tax.

Is there different type of Professional Tax?

The professional tax is classified in to two types. Professional Tax -Employer and Professional Tax - Employee.

What is Professional Tax - Employer Registration (Enrolment Certificate)?

Every business is assumed as employer. Every business establishment must obtain the Professional Tax - Employer Registration / Enrolment Certificate (EC) within 30 days of commencement of business. The employer must pay professional tax of Rs.2500.00 to the Government annually.

What is Professional Tax – Employee Registration (Registration Certificate-RC)?

Every employee whose income is Rs.15000 or more is liable to pay professional tax of Rs.200 per month. The employer is liable to pay this amount to the government deduct this amount from the salary of the employee. Every employer who has employees drawing salary of Rs.15000 or more has to obtain the Professional Tax – Employee Registration / Registration Certificate-RC within 30 days of staring the employment

How much is professional tax in Karnataka?

Professional Tax in Karnataka is Rs.200.00 per month for all employees having monthly gross salary or wage of Rs.15000 or more

Is Professional Tax Registration is Mandatory for all business?

Yes. Every business (other than exempted category) has to obtain the Professional Tax - Employer Registration or Enrolment Certificate-EC with in 30 days of commencement of business. However, Professional Tax – Employee Registration or Registration Certificate-RC is required only when the business have employees drawing salary of Rs.15000 or more

What is the penalty for delay in Professional Tax Registration and Payment?

If the employer fails to obtain the Certificate of Enrolment in time, the same shall attract a penalty of Rs.1,000/- and the yearly taxes that are pending to be paid from the date of commencement of business also has be paid. If the employer fails to make the payment of tax in time, the same shall attract simple interest at 1.25% for each month or part thereof. In addition to the interest, the professional Tax Officer may impose an additional amount not exceeding fifty per cent of the amount of tax due a penalty as well.

What are the Compliance under the Professional Tax Regulations ?

Every registered business with Enrollment Certificate shall pay tax every year before 30th of April at the specified rates.

Professional Tax - Employee

Rs.7471.00

Rs.6000.00

Rs.4999.00

Rs.5000.00

Rs.1999.00

Rs.4999.00

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