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An Overview of Professional Taxation in Karnataka

The state government levies a professional tax, which is levied on both salaried employees and people. Employees working in an organization or institution, such as a factory, would also be required to go through the professional tax registration process in Karnataka.


Professional tax registration in Karnataka is required for businesses within 30 days of hiring workers and for professionals within 30 days of beginning their practice. The professional tax must be deducted from the payor wages received. However, the amount of professional tax varies by state and is restricted at Rs. 2500 per year. If you have employees in more than one state, you must get professional tax registration in each state.


Who is in charge of Professional Tax in Karnataka?


The Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976 governs professional taxation in the state. If an employee or professional has a monthly salary that exceeds the specified amount, they must pay professional tax in Karnataka, India. Professional taxes can also be paid online.


Eligibility Criteria for Professional Tax Registration in Karnataka


If the employee’s salaries are more than Rs. 10,000/- per month, the employer is required to go through the process of professional tax registration in Karnataka.


Under this act, the employer would be required to deduct a portion of the employee’s earnings in such cases.


The employer is required to deduct the professional tax before the end of the month’s 20 days.


If the threshold or amount of professional tax payable in Karnataka is less than Rs. 5000/- per month, the employer might choose to pay professional tax within 20 days after the quarter’s end.


The responsible officer must issue a professional tax registration certificate to all employees.


Professional tax registration is required for all people and professionals. Individuals listed in Sl. Nos. 2–74 of the Schedule (Annexure 1) must acquire a Certificate of Enrollment from the Profession Tax Officer.


Who is required to pay Professional Tax in Karnataka?

Professional Tax must be paid by the following individuals:


Exemptions from Professional Tax in Karnataka

Professional tax will not be charged in Karnataka for the following individuals:


  • Senior citizens are not required to pay professional tax.

  • Except for Bangalore and Bangalore Rural District, all charity and philanthropic hospitals or nursing homes are located in districts below the taluk level.

  • If you are a director of a Karnataka-registered firm and are also nominated by financing agencies owned or controlled by the State Government or other statutory organizations.

  • Such foreign technicians who are employed in the state and whose employment has been approved by the Government of India for tax exemption for a set length of time (exemption for 2 years from the joining date).

  • Professional tax is also excluded in Karnataka for members of the Armed Forces as defined by the Army Act, the Navy Act, and the Air Force Act.

  • People who are blind are paid salaries and wages.

  • People who are deaf or deafeningly deafeningly deafeningly deafeningly

  • Holders of a single taxi or a single three-wheeled goods vehicle permit.

  • Institutions are concerned with the teaching of Kannada or English shorthand or typewriting.

  • A physically disabled individual must have a lifelong impairment of at least 40%. (subject to production of a certificate from the HOD of Government Civil Hospital).

  • If you have a single child and have had a sterilization operation, you must produce a certificate from the District Surgeon, Government Civil Hospital.

  • Personnel of the Central Para-Military Force (CPMF).

  • If you carry an educational institution in respect of their branches teaching classes up to the 12th grade or pre-university education.


What are the ramifications of non-registration of professional taxes, non-filing of returns, and non-payment of taxes in Karnataka?


Registration of Employers

The penalty for an employer failing to register for professional tax in Karnataka is Rs 1000. In the case of any other individual, Rs. 500/-


Employee Enrollment

If an employee fails to register for professional tax, the penalty will be from the date of employment until the registration is obtained, plus simple interest at 1.25 percent per month, plus a penalty equivalent to the tax to be paid until the date of payment.


Non-filing of Tax Return

The penalty for failing to file a professional tax return is Rs. 250/- for an employer.


Failure to Pay Tax

If an enrolled individual or registered employer fails to pay the tax, interest at the rate of 1.25 percent per month will be charged, and the penalty will not exceed 50 percent of the tax amount due.


What is the procedure for registering as a professional taxpayer in Karnataka?


For professional tax registration in Karnataka, the following procedure must be followed:


Registration for the E-Prerna Portal- 


First and foremost, the applicant must visit the website (https://pt.kar.nic.in/(S(t5zcqklwvzs1h42orkxvrtdv))/Main.aspx). The applicant would need to click on Enrollment of Application on the application’s left sidebar. If the applicant is registering for the first time to pay professional tax, the enrolment of professional tax must be taken into account. If the applicant is new, click and pick the new enrolment category.


Choose the Business That Is Relevant to the Enrollment- 


The applicant must then choose a suitable business for enrolment in the professional tax. The employer must submit information about the application here. This requires the applicant to indicate the fiscal year for which professional tax must be paid. If the applicant is already enrolled for the payment of professional tax in Karnataka, the applicant must pick the ‘Enrolled’ option. 


The applicant must then enter the 9-digit alphanumeric enrolment certificate for Karnataka professional tax. Personal information about the firm must be supplied while selecting the business type and status. If the company has numerous branches where operations are carried out, this must be specified in the form’s drop-down option.


On the Schedule, click on the Relevant Tax Applicable- 


The following step is for the employer to select the applicable tax for the specific business. The Karnataka professional tax schedule must be considered for this.


Payment- 


The applicant must choose the manner of payment of professional tax in the final step. The applicant has the option of paying online or offline. For the applicant, there is an option for e-payment. If this is not possible, the applicant may pay by cash, check, or DD. 


Following that, the candidate would be given a PTN No. or a Professional Tax Number. Following that, the applicant must submit the professional tax number as well as the professional tax data. The procedure for professional tax registration is then completed.


Employer Registration for Professional Tax in Karnataka 


  • First and foremost, every employer must obtain a professional tax certificate in order to pay professional tax in Karnataka.

  • For professional tax registration in Karnataka, the employer must visit the e-Prerna website at https://pt.kar.nic.in/(S(t5zcqklwvzs1h42orkxvrtdv))/Main.aspx. Following that, the employer would need to proceed to Karnataka’s new professional tax registration area.

  • The employer is required to file all business-related information, which includes the company’s constitution, type of business, and PAN details.

  • Once this is completed, the professional tax department’s office will issue a PIN in the company’s name.

  • Following that, the employer must enter the information into the enrolment certificate.

  • If the applicant is a Karnataka GST registered business, the 15-digit number must be provided into the system.

  • Following that, the status of professional tax can be verified online by entering the Aadhaar number and registered cellphone number.

  • The status of the company application can be viewed via the drop-down option as described.


What documents are required for Karnataka Professional Tax Registration?


For Professional Tax registration in Karnataka, the following documents are required:


  • Passport-size photograph of the proprietor, partner in the case of a partnership firm, or directors in the case of a company, as applicable.

  • Address evidence of the Proprietor, Partner in the case of a partnership firm, or Directors in the case of a company, as applicable

  • Address Proof of Business

  • PANEL (Permanent Account Number)

  • Salary information for employees


If a Professional Tax Registration was not obtained in the first year, financial statements must be supplied as well. If this is not your first year in business or profession, or if you did not receive PT registration when you started, you must additionally produce financial statements.


How much Professional Tax is paid by the Employer, and how much Professional Tax is required to be paid by the Employer on behalf of the Employees?


Every employer is expected to pay professional tax on or before April 30th of each year. Professional tax must also be deducted from employee salaries and remitted to the appropriate authorities. The details of professional tax owed by the employer are stated in the Professional Tax Act schedule.


The following is a definition of professional tax payable by the employer:



Description

Amount Payable

In case of no employees

Nil

In case of a maximum of 5 employees

Rs. 1000/- Per Annum

In case of more than 5 but not more than 10 employees

Rs. 1500/- Per Annum

In case of more than 10 employees

Rs. 2500/- Per Annum


All dealers who are registered or are required to be registered under the Karnataka Sales Tax Act, 1957 / The Karnataka Value Added Tax Act, 2003 and have the following annual turnover:


Description

Amount Payable

Not more than Rs. 2 lakhs

Nil

More than Rs. 2 lakhs but less than Rs. 10 lakhs

Rs. 1000/-

More than Rs. 10 lakhs but less than Rs. 25 lakhs

Rs. 1500/-

More than RS. 25 lakhs

Rs. 2500/-


When an employee’s pay exceeds Rs. 15000, Professional Tax (PT) will be deducted up to Rs. 200 per month.


How can we file our Professional Tax Returns?


Once you have registered with the Professional Tax Registration Department, you will be given an ID Password that will allow you to file a professional tax return. Using such an Id password, you can file a professional tax return on the Karnataka government’s website. To file a professional tax return, log in to your account and make a payment based on the criteria, such as monthly or quarterly filing.


How can we assist you with Professional Tax Registration?


Compilation of all required papers

In the first phase, our professionals will gather all of the paperwork required for your Professional Tax registration in Karnataka.


Professional Tax Registration Preparation

Our experts will apply for Professional tax registration with the Karnataka government based on the documents and information provided.


To finish this procedure, you must fill out an inquiry form on our website and click the Get Started option. Our expert will return your call and answer your question. Following the initial payment, our system will generate an order number, which will be assigned to a dedicated in-house CA.


Customer satisfaction is our top goal at Startease. You can contact us via chat or email at ease@startease.in.


FAQ’s


Question: What is the minimum wage required to pay professional taxes in Karnataka?

Answer: In Karnataka, the minimum wage for professional tax payment is Rs 10,000.


Question: Is the professional tax payment process done online?

Answer: Yes, you can pay your professional taxes online.


Question: Can I use the physical mode to register for professional taxes?

Answer: Yes, both the offline and internet modes can be used for professional tax registration in India.


Question: Will I be given an enrolment number for professional tax registration in Karnataka?

Answer: Yes, the applicant would be given a unique enrolment number for professional tax payment.


Question: Is it necessary for me to be present in-person to pay my professional taxes?

Answer: Because professional tax payment is entirely online, the applicant does not need to be present for professional tax registration in Karnataka.


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