Profession tax is imposed by the state governments in India. Any individual earning an income from salary or any individual, Sole Proprietor, Partnership Firm or company practicing Professions, Traders Callings and Employments Act, 1976, are required to pay professional tax. Different states have different rates and methods of collection. In India, profession tax is imposed at the state level, however, not all states impose this tax.
There are two types of registration.
Every person liable to pay tax under this Act (other than a person earning salary or wages, in respect of whom the tax is payable he his employer) shall obtain a certificate of enrollment from the prescribed authority in the prescribed manner. This registration is for Employer and tax need to be paid annually. After registration, the certificate needs to be renewed every year.
Every employer not being an officer of Government liable to pay tax under section – 4 shall obtain a certificate of registration from the prescribed authority in the prescribed manner. This registration is for the Employee of the company whose Gross salary is above 15,000 per month. It is the employer's responsibility to deduct the Professional Tax from Employee and remit the same to the Government monthly. There are monthly returns to be filed after registration, failing which, interest and penalty will be levied.