If you have ever noticed your pay slip each month you would have seen a minor deduction along with the likes of HRA (housing rent allowance), the basic salary related breakups, and conveyance, to name a few. This deduction is normally in the region of INR 200 and is referred to as professional tax.
As far as India is concerned, this tax rate happens to be different for each state. In fact, in certain states you may also see that there is no deduction being made under this particular heading.
What is professional tax and who levies it?
Professional tax can be described as a tax that is charged by the state government. It is normally imposed on all people who are earning a living some way or the other in the state. In this case the term professional should not be confused with the definition of professionals that would include people such as doctors.
This is basically a tax that you have to pay if you are an individual who earns and meets the particular limit. This figure normally differs between states.
However, it does not get above INR 2500 on a yearly basis no matter which state you may be in.
It also needs to be stated in this context that this rate is different for different individuals as well.
Who is liable to pay professional tax in Bangalore?
In Karnataka Tax on Profession, Trades, & Calling, both salaried as well as self-employed earners and the business entities have to pay this tax to the state government of Karnataka. As far as salaried people are concerned it is the responsibility of the employers to collect the tax.
The following categories are required to pay professional tax in Karnataka:
- Companies
- Corporations
- Other corporate bodies
- Firms
- Hindu undivided family (HUF)
- Any club or association
- Any society
With regards to the self employed people they need to pay it to the people who have been appointed by the state government for such purposes. Professionals such as doctors, chartered accountants, and lawyers have to pay this particular tax over here in Karnataka.
See, these professionals are required to pay the profession tax:
Professional tax rate in Karnataka
In Karnataka professional taxes are levied as per the Karnataka Tax on Professions, Trades, Callings and Employment Act 1976.
As far as salary and wage earners in the state are concerned professional tax does not apply if you earn less than INR 15000 a month.
If you are earning more than INR 15000 a month for the year 2019-20; you would need to pay INR 200 for each month.
However, it also needs to be stated in this particular context that there are other categories of professional tax payers in the state as well and the rates for them are different.
Professional tax slab rate in Karnataka for salaried person
| Salary/Wage Range | For Employee | Tax Amount |
| Less than Rs. 15,000/- Per Month | 1 Employee | Nil |
| Not less than and above Rs. 15,000/- Per Month | 1 Employee | Rs. 200 |
Who are exempted from paying professional tax in Karnataka?
There are certain classes that do not need to pay professional tax in the state.These are –
- All the philanthropic and charitable hospitals and nursing homes that are located at places that are lower than the taluk level in each and every district of the state would not need to pay this tax. This however does not include Bangalore and the Bangalore Rural District.
- Directors of companies that are registered in the state and have been nominated by financing agencies that are controlled or owned by the state government, or any other statutory body, are exempt from this tax.
- Technicians from other countries working in the state under appointment from the national government are exempted from paying this tax as well. However, this exemption would be applicable only for a period of 2 years from the date when the concerned professional joined his work.
- The employee who has attained 65 years of age, tax is not deducted from him/her.
- The employee who has employed but not worked more than 120 days in respective year, tax shall not be deducted from him.
- Physically handicapped and blind persons are exempted from Karnataka professional tax.
- The persons running educational institutions and teaching classes up to 12th standard or pre-University are exempted.
Documents required for professional tax registration in Karnataka
Following are the documents needed for registering for professional tax in Karnataka:
- Copy of PAN (permanent account number) Card for applicants – in case it is a company it is the directors’ PAN cards that would be needed
- AOA (articles of association) and MOA (memorandum of association) if it is a company
- Copy of ID (identification) proof of applicants and director in case it is a company –it is preferable to provide the Aadhaar Card in these cases
- Declaration, if it is a company
- Passport size photo of applicant or director in case it is a company
- Sale deed if the property is owned
- Mobile number and email ID of applicants and directors if it is a company
- Rent agreement if the property has been rented
- Residence proof of registered office – it is better to provide copies of mobile bill, telephone bill, electricity bill, or gas bill
- PT authorization letter
You need to provide scanned copies of these documents when you make the application.
How to enroll for professional tax (PT) registration?
We want to clear you one thing regarding on enrollment and registration. Because these two things are little bit different; so who shall have to acquire PT enrollment certificate and who needs this registration?
So, you have to understand and aware about the simple difference on them.
Case of Enrollment
As it is stated in Karnataka Act 35 of 1976; In Schedule for Class of persons from Sl. No. 2 to 74 shall have to obtain a Certificate of Enrollment from the Profession Tax Officer of the jurisdiction.
The companies or businesses owners have the responsibilities to enroll for PT (professional tax) for doing business in Karnataka State and shall have to pay certain annual tax before 30th April of every year.
Case of Registration
The employees of Sole Proprietorship/ Partnership/ LLP/ OPC/ Pvt Ltd/ Public companies or any other business organization are getting salary above and not less than Rs. 15,000 monthly have to pay tax on profession.
And it is the responsible of employer to deduct the tax from employees account and pay to State Government and it can be done through filing of monthly PT return. For this, the organization has to obtain PT registration from department.
Therefore, a company having employees has to do both registration and enrollment.
If you wish to be registered for professional taxes in Karnataka; you can get help and support from us. We’ll help you complete your PT application process & obtain enrollment and registration certificate for your business.
PT registration process
You need to visit the official personal tax website. The process is rather simple. By visiting the website you can apply online for registration. Go to https://pt.kar.nic.in/ link for personal tax enrollment and then click on the same. After that you would need to follow the instructions as they appear on the website.
4 simple steps to get PT enrollment & registration certificate:
- Prepared documentation for PT registration
- Visit to e-PRERANA website
- For Enrollment Certificate (EC), click on “Enrollment Application” from left panel of e-Services and fill the details. Then make payment online, then take a print of enrollment application and after that you will get enrollment certificate.
- For New Registration Certificate (RC), click on “New RC Request”, fill the entire mandatory field, Sent OTP to Mobile and Verify the number, then you will receive a Acknowledgement No; Through this you can get a RC certificate.
How long does it take to register professional tax?
It takes at least 5 days of working time in Karnataka to get PT enrollment and registration number.
We can apply it in 1 day; however to get the User ID and Password, we’ve to visit the PT office and submit the application with all documents in physical data format, and then the concerned PT officer will verify it. After verification, they issue a User ID & Password for your organization and we receive it. Then we can proceed for PT filing.
Note: The important thing is that the person who is going to collect the login details from PT office has to take an authorization letter from organization head with seal and signature. So that he/she can be treated as the concerned person for receiving details.
Due date for payment of professional tax in Karnataka
As per Karnataka profession tax, every employer or other taxable person has to make the payment of professional tax on or before 20th of every subsequent month.
And 30th May of every year is the last date for filing of annual statements and it is to be filed with Form-5A.
Professional tax registration fees
Consultants or tax professionals charge fees for doing your PT registration and filing returns on time and it varies from one consultancy to other. So before going with them, ask how much they are charging, what services they’ll offer, for how many employees they’ll do filing or anything it is coming to your mind can ask and judge them with their work capability, service and its output.
Penalties for not paying the professional tax
If as an employer you do not register for professional tax in Karnataka you would be charged a fine of INR 1000. In case, you are not a business owner this fine would come down to INR 500.
If as an employer you do not file returns for your employees you would have to pay a fine of INR 250.
If you have registered for the tax and are not paying it then a fine of 1.25 per cent of the outstanding amount would be levied at you on a monthly basis. However, this can go up to a maximum of 50 per cent of the outstanding amount.
How to file PT return online in Karnataka?
Nowadays, the state government of Karnataka has come up with a website named e-Prerana (web link – https://pt.kar.nic.in/(S(pvyjes1a4nocykl51dyfdnae))/Main.aspx). Here professional tax payers can come and enter their returns, and then submit it online as well. This website also enables them to make the payments online.
If they wish they can also generate professional tax certificates online and the best part of this is that they do not also need to go to the professional tax office for the purpose.
