Understanding Karnataka Professional Tax: Registration and Payment guide
Professional tax is a direct tax imposed and collected by State Governments in India. Individuals earning income through salary or practicing professions such as chartered accountants, company secretaries, lawyers, doctors, and those engaged in businesses like service providers, manufacturers, and traders are required to pay professional tax.
Professional tax applies to individuals whose income meets a specified threshold, which varies across states. However, the maximum annual professional tax liability does not exceed INR 2,500, regardless of the state.
Employers are responsible for deducting professional tax from employees’ salaries each month and remitting it to the government. This payment qualifies for income tax deduction.
Not all states impose professional tax. The states that do include Punjab, Uttar Pradesh, Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, Jharkhand, and Sikkim.
Professional Tax in Karnataka
In Karnataka, both salaried and self-employed individuals must pay professional tax as per the Karnataka Tax on Professions, Trades, Callings, and Employment Act, 1976. Employers are responsible for collecting tax from their employees, while self-employed individuals must register and pay it directly unless exempted by the State Government.
Professional Tax Slab Rate for Salaried Individuals
|
Salary (per month) |
Tax Amount |
|
Less than INR 24,999 |
Nil |
|
INR 25,000 or above |
INR 200 per month |
Documents Required for Registration
- Certificate of Incorporation/Partnership Deed
- Copy of PAN (Company/Firm)
- AOA and MOA
- PAN & Aadhaar Card copies of Directors/Partners/Proprietor
- Passport-sized photo of the applicant
- Mobile number and email ID of the applicant
- Valid rental/lease agreement or property tax receipt (if owned)
- Recent one-month bank statement (Company/Firm/Proprietor)
- Salary register
- PT Authorization letter
Professional Tax Registration Process
Registration can be done online by visiting PT e-PRERANA. Follow these steps:
- Prepare required documents.
- Visit the e-PRERANA website.
- For an Enrollment Certificate (EC):
- Select “Enrollment Application,” fill in the details, make the payment online, print the application, and obtain the certificate.
- For a Registration Certificate (RC):
- Select “New RC Request,” fill in details, verify the mobile number via OTP, and receive an Acknowledgment Number to obtain the certificate.
The process takes 4-5 working days. To expedite it, visit the regional PT office with physical documents and authorization from the organization head.
Payment & Return Filing Due Dates
- Employers: Annually on or before 30th April.
- Employees: Monthly payment and filing on or before the 20th of the following month.
Penalties
- Non-registration by employers: INR 1,000 fine; non-business owners: INR 500 fine.
- Non-filing of returns by employers: INR 250 fine.
- Non-payment after registration: 1.25% monthly interest, up to 50% of the outstanding amount.
Exemptions from Professional Tax in Karnataka
- Charitable hospitals and nursing homes below Taluk level (excluding Bangalore and Bangalore Rural District).
- Directors nominated by State-controlled financing agencies.
- Foreign technicians appointed by the national government (up to 2 years).
- Employees aged 65 years and above.
- Employees working fewer than 120 days in a year.
- Physically handicapped and blind individuals.
- Educators running institutions up to 12th standard or pre-university level.
For assistance with PT registration, contact us at reachus@msassociates.pro or call 080-41633750 / 9880542668.