Professional tax is a direct tax imposed on all types of professions, trades, and employment in proportion to an individual’s income.
As per Article 276 of the Constitution, the responsibility of levying profession tax lies with the state governments. That’s why it differs from state to state.
Each state has different rules and regulations for Professional Tax and there are some states which do not levy professional tax.
The State of Karnataka levies professional tax. Let’s understand all the essential information regarding professional tax in Karnataka through this article.
Eligibility for Professional Tax in Karnataka
- Under the Karnataka Tax on Professions, Trades, Callings and Employments Act of 1976, individuals who earn a monthly income of Rs.10,000 or more are obligated to pay professional tax in Karnataka.
- For salaried individuals with a monthly income greater than Rs.10,000 but less than Rs.15,000, the professional tax is Rs.150 per month.
- If the monthly income of salaried individuals is over Rs.15,000, the professional tax is Rs.200 per month.
- In the case of legal or medical practitioners, or professional consultants, the professional tax amount is dependent on the length of their service. The website: The Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976 will help you determine the tax liability depending on your length of your service.
Who submits the Professional Tax in Karnataka
- If you are a salaried employee in Karnataka, your employer is responsible for deducting the professional tax from your monthly salary and depositing it with the relevant authority.
- However, if you are a self-employed professional or do not work for any organisation, you will need to pay the professional tax online or offline directly by visiting the local Professional Tax office designated for tax collection in your area.
How to submit Professional Tax in Karnataka?
- The Karnataka government has created a website, e-Prerana, specifically for professional tax payment.
- Employers after getting Professional Tax Registration can make payments online, as well as access additional information regarding professional tax in Karnataka.
Who needs to get Professional Tax Registration in Karnataka?
Under the Karnataka Tax on Professions, Trades, Callings and Employments Act of 1976, employers are responsible for deducting the professional tax from the salary or wages of their employees who earn a monthly income of not less than Rs.10,000.
Thus, the employer employing people with a salary more than Rs. 10,000 must get professional tax registration and pay tax on behalf of their employees.
All employers, except for the government, must obtain a Professional Tax Registration Certificate from the Profession Tax Officer in their jurisdiction.
It is the employer’s responsibility to ensure compliance with these regulations otherwise they will have to face severe penalties.
Time Limit for submitting Professional Tax in Karnataka
Taxpayers must pay the professional tax in Karnataka within 20 days after the end of each month.
Penalties under Professional Tax Act, 1976 in Karnataka
- Penalty for not obtaining Professional Tax Registration is Rs. 1000/- in case of employer.
- In case of other persons, the penalty for not obtaining Professional Tax Registration is Rs. 500/-.
- In the case of non-filing of returns by an employer, a penalty of Rs.250/- may be levied.
- For enrolled individuals and registered employers who do not pay the professional tax, a penalty may be imposed. This penalty may include an interest rate of 1.25% per month on the unpaid tax amount.
Hence, It is important for businesses to get Professional Tax Registration and enrolled individuals plus registered employers to pay their professional tax on time to avoid these penalties.
Professional tax is a direct tax levied by state governments on professions, trades, and employment based on the individual’s income.
In Karnataka, the Karnataka Tax on Professions, Trades, Callings and Employments Act of 1976 mandates individuals earning a monthly income of Rs.10,000 or more to pay professional tax.
Employers are responsible for deducting the tax from their employees’ salaries and paying it to the relevant authority. Self-employed individuals or those who do not work for an organisation must pay the tax directly to the local professional tax office.
Employers must obtain a Professional Tax Registration Certificate, and failure to comply may result in penalties.
These penalties range from Rs.250 to 1.25% per month on the unpaid tax amount. It is crucial for businesses to register and pay professional tax on time to avoid these penalties.
Moreover, If you want any other guidance relating to Professional Tax Registration please feel free to talk to our business advisors at 8881-069-069.
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