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Once you are complete with your company registration, you are required to keep in account the mandatory compliance and various Tax registrations, one such registration is Professional tax registration. Let us talk about professional Tax.
What is professional tax?
Professional tax or PT is kind of a state government fees which professionals such as doctors, CA, lawyers etc are required to pay, It’s a state government tax that not all the states applies. The rationale behind this tax is that it enables the government to use the revenue where people who are entering profession or a sandwich to the various people so they charge a tax on that this is to provide a better infrastructure this is generally controlled by the local civic body of the Municipal Corporations to his is to provide better infrastructure to various professionals.
Types of professional Tax
There are two kinds of professional tax which are charged by the government-for the business so if you are doing any business or a professional service you have to leased upon yourself as a company here the taxes are paid mostly in advance for the next whole year and then second type is applicable to all the employees so if you are employing people and if you are adding employees who have more than ten thousand of salary per month on that you have to take a registration and then deduct professional tax from the Salaries of the employees. The range or threshold varies from state to state. This professional tax is treated as a total exemption from the income tax that may be applicable to the employees as a taxable income so they can get an exemption from their taxable income for calculating income tax. Professional Tax Registration
There are two types of registration
if you are just operating a small business you may take or may not take this and it is advisable that you should take this only when you have an employee’s of more than10,000 per month salary even if you have only one employee. In case you have good number of employees, let say 100 employees, you have to take the registration one time and then renew it every year. The Payments of the taxes are done on a monthly basis or quarterly basis depending on how big is your term like.
Typically, if your total taxes is less than 5,000 then you are allowed to pay the bail amounts quarterly and also find returns quarterly otherwise if you are required to pay more than this amount, you have to pay make the payments monthly and even file the returns monthly. The filing of professional tax return is important as any non-compliance may lead to trouble.
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