Professional Tax Registration

Professional Tax is a tax levied by state governments on salaried employees, professionals, and traders for practicing their profession or conducting their business.

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Professional Tax Registration

The term "professional tax" refers to the fee that the state government charges for the facilities that it offers to its residents to enable them to practice their professions without difficulty. The income of the following determines whether this tax is applicable, which is imposed on all professions, trades, and employment:

  •  Employment
  •  Trade
  •  Profession
  • State-by-state differences exist in professional tax. However, all states use a slab system based on income to pay professional tax, hence there are distinct sets of rules and regulations to control the same depending on the state. In addition, anyone operating a freelance business alone must get a professional tax certificate in accordance with any applicable financial thresholds set by the relevant state authorities.

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Benefits of Professional Tax Registration

Following are some advantages of professional tax registration:

Minimal Restriction is Applied

The Professional Tax Compliance is easy to follow, which leads to a quick registration process with few constraints.

Aids in Preventing Penalties

According to the law, paying professional tax is required. As a result, paying professional tax on time might help the employer or a self-employed person avoid fines and other negative consequences.

Facilitates Easy Registration Process

Simple professional tax compliance might lead to a straightforward registration process.

Aids in the execution of programmes for development and welfare

The Professional Tax serves as a source of income for state governments, which enables them to put plans in place for the varied welfare and development of the area.

Acceptable Deductions

The professional tax that was previously paid can be written off by either the employer or the self-employed individual.

Who are liable for Professional Tax Registration

You may view the list of people who can register for professional tax registration here: The obligation to pay tax depends on the state where it applies.

  • Individual;
  • Public, private, or one-person business;
  • Partnership;
  • the Cooperative Society;
  •  association of individuals;
  •  Hindu Undivided Family, or HUF.
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Documents Required For Professional Tax Registration

The following list of important documents is provided in order to register as a professional tax advisor:

  •  Completed Application
  •  If the application is an organization, the organization's COI, AOA & MOA, and PAN (attested by the Director).
  •  Including each director's passport-size photo, address proof, and identity verification
  • Including a bank statement and a voided cheque, the Company's bank account information.
  •  A rent agreement or an owner's no-objection certificate might serve as proof of registered office in the event of rented property.
  • In the case of a corporation, the Board Resolution; in the case of a partnership, the concerned Partner's Declaration of Consent, coupled with Salary and an attendance log.
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Process for Professional Tax Registration

Depending on the state, there are different requirements for professional tax registration. In addition, depending on what the State requires, Returns must also be filed at predetermined periods. The method listed below must be followed by professionals and employers seeking professional tax registration.

  • Step 1: Submitting the Application along with the Required Documents The applicant must submit the application form together with the required paperwork.
  • Step 2: Submitting the Application to the Affecting State Government & Tax Department The applicant must submit the application and all other paperwork to the appropriate state government. The tax department should receive a copy of the same as well.
  •  Step 3: Review by the Tax Authority: The Tax Authority must review each application after receiving it to make sure all the information is accurate.
  •  Step 4: The issuance of the registration certificate, which the authority will do after thoroughly reviewing all the paperwork.
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Frequently Asked Questions

No, the procedure of forming a company in India is entirely online. You do not need to be physically there at all because you can complete all documents electronically. All the necessary forms and documentation must be digitised and sent to us.

Yes, regardless of its revenue, a private limited firm is required to employ an auditor. In fact, within 30 days of formation, an auditor must be engaged. Given that penalties for non-compliance can reach millions of rupees and possibly result in the blacklisting of directors, compliance is crucial for a private limited business.

The Ministry of Corporate Affairs makes available the company's registration certificate online.