Types of Professional Tax
There are two types of Profession Tax certificates that a company needs:
1. The Professional Tax Registration Certificate (PTRC) is required for its role as an employer;
2. and the Professional Tax Enrolment Certificate (PTEC) that empowers the company to deduct Profession Tax on salaries of a certain amount.
No matter in which state of India you are running your business, you should know that the professional tax registration process is mandatory within 30 days of employing staff in a business or, in the case of professionals, 30 days from the start of the practice.
Varies from state to state
Employers with Certificate of Enrolment can be penalized if they don’t deposit the PT of employees
A separate application has to be submitted for every company branch office depending on the particular state where the office is situated.
Foreign Employees in such Companies are not liable to pay Professional Tax
PTRC Payment and Filing of Returns
The professional tax return must be filed by those having professional tax registration. Returns to be filed monthly/half-yearly or annually depending on the state of applicability within the due date and also on company incorporation date. For example, in the state of Maharashtra, those entities having a professional tax liability of more than Rs.50, 000 are required to file a monthly professional tax return before the last date of each month. Those entities having a tax liability of less than Rs.50, 000 in the previous year are required to file a tax return annually – on or before the 31st of March.
Penalties for Default
There are a few penalties in place for breaching the rules surrounding professional tax, including a penalty of 2 % per month for a delay in making the payment. Its non-payment invites a 10 % additional penalty.
Moreover, even a delay in obtaining “certificate of enrollment” is penalised – this is at the rate of INR 2 per day. If the information provided at the time of enrollment is found to be incorrect or false, the penalty is 3 times the tax amount due. Some states slap a penalty of INr\ 300 for every late filing of returns.