Professional Tax - Employer

Professional Tax Employer Registration or Enrolment Certificate (EC) is mandatory for every Business with in 30 days of business registration or commencement of business.

Professional Tax Employer 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. Employees

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

B. 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.

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 Employer Registration - Certificate of Enrollment (EC)

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.

Every registered business with Enrollment Certificate shall pay tax every year before 30th of April at the specified rates. The amount of tax payable by the employer and the date by which the amount to be paid shall be mentioned in every certificate of enrollment. If an employer has fails to obtain the registration or enrollment within the time specified, the assessing authority shall impose a penalty for delay in obtaining the Registration.

The rate of Employer Professional Tax for Company, LLP and Partnership is Rs.2500.00 per year.

Process of Professional Tax Employer Registration


Business Registration / Incorporation

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

Application to Professional Tax Department

Submit online application for Employer Registration (Enrolment Certificate) to Professional Tax Department with all supporting documents

Obtaining Certificate of Enrolment (EC)

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

Requirements


Mandatory Registration

Every business entity shall obtain the Professional Tax Certificate of Enrollment (EC) from the Profession Tax Officer within Thirty days from the date of commencement business.

Professional Tax on Registration

Every Employer to pay professional tax of Rs.2500.00 on registration

Yearly Payment of Professional Tax

Every registered Employer to pay professional tax of Rs.2500.00 in April every year.

Documents Required


Business Documents

  • Incorporation Registration / Certificate

  • Business PAN Card

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

  • PAN of Directors

  • Address Proof of Directors

  • List of Directors / Promoters

  • Authorisation Letter

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How it works

  • Business Registration as Company / LLP / Partnership

  • Registration with Professional Tax Dept

  • Obtain Enrolment Certificate (EC)

FAQ

Frequently Asked Questions on Professional Tax - Employer

What is Professional Tax?

Professional Tax is a tax on employment levied by the State Government. Professional tax is levied on income of an employee. The employer is liable to pay the same to the Government and shall be deducted from the salary of the employee.

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 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.

Who all are exempted from Professional Tax Registration in Karnataka?

The following class of persons are exempted from payment of Profession Tax.

All charitable and philanthropic hospitals or nursing homes situated in places below the taluk level in all districts of the State except Bangalore and Bangalore Rural District.

Directors of Companies registered in Karnataka and nominated by the financing agencies owned or controlled by the State Government or by other statutory bodies.

Foreign technicians employed in the State provided their appointments are approved by the Government of India for the purpose of exemption from payment of income tax for the said period (exemption is for a period of 2 years from the date of their joining duty).

Combatant and civilian non-combatant members of the Armed Forces who are governed by the Army Act, the Navy Act and the Air Force Act.

Salaried or wage earning blind persons.

Salaried or wage earning deaf and dumb persons

Holders of permits of single taxi or single three wheeler goods vehicle.

Institutes teaching Kannada or English Shorthand or Typewriting.

A Physically handicapped person not less than 40% of permanent disability (subject to production of certificate from the HOD of Government Civil Hospital).

An ex-serviceman not falling under Sl No.1 of the Schedule.

A person having single child and who has undergone sterilization operation, subject to production of a certificate from the District Surgeon, Government Civil Hospital, for having undergone such operation.

Central Para Military Force (CPMF) Personnel.

Persons running educational institutions in respect of their branches teaching classes up to twelfth standard or pre-University Education.

Professional Tax - Employer

Rs.6000.00

Rs.4999.00

Rs.1999.00

Rs.7999.00

Rs.4999.00

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