Updated on April 02, 2025 06:59:26 PM
Professional tax is State level tax levied on persons practicing any profession, trade, calling or employment selected by him for livelihood, which helps state governments in receiving revenues in India. As of the time of writing this, this tax is compulsory in most of the states and union territories in India and is usually recovered by the employers from the employee’s paycheck or paid by the independent contractor. However it is pertinent to mention here that currently, professional tax is not imposed in the Union Territory of Andaman and Nicobar Islands. This exemption makes it unique from most of the states and territories that professional tax is a separate legal code.
In most areas, the tax is fairly based on income bands whereby the taxpayers who earn more, are expected to pay more tax. One may go ahead to infer that due to the lack of professional tax in the Andaman and Nicobar Islands it aids the inhabitants and ventures located within the area due to reduction in the amount of money required to meet professional tax charges. This status differs the region from other states in the fiscal area of the country and makes the territory one of the few places in India where professional tax is not included in the fiscal system of the region, while in other states of the country, professional tax remains an essential tool of generating local revenues.
Professional tax is the state-level direct tax levied by the different Indian states from individuals and other legal entities involved in different professions, trades, and employment. Income tax is the tax levied by the central government and is the same throughout the country, but the professional tax is the tax that is collected by every state government of India, and that’s why different states have different rates of professional tax and different rules and regulations also.
The ambit of professional tax certification embraces all manner of professions and trades and extends to different professions and professions such as doctors, lawyers, and accountants, as well as business and corporate firms, among others. There are also some differences in the rates of professional tax and its regulations in different states of India depending on the profession or type of business.
Registering for professional tax is beneficial since it is legal and has practical values. Below are some benefits of professional tax registration:
Online registration of Professional Tax In Andaman and Nicobar Islands is possible through the official site of Andaman and Nicobar Islands Commercial Taxes Department. Below is the process to be followed while registering for Professional Tax in Andaman and Nicobar Islands:
The application for professional tax registration has to be done on Form I if the applicant is an employer or on Form II if he is an employer. This application should be made within 30 days from the period when one is responsible to pay the professional tax.
It can be done online under the reference of the Andaman and Nicobar Islands Commercial Taxes Department. Candidates are required to complete some of the enclosed forms and submit the necessary enclosures like:
Finally, once the application has been approved, the TIN will be assigned and this will be required in all the transactions that involve taxes.
Once registration is complete, a certificate of enrolment is issued to the employer through which employees’ salaries can be withheld for professional tax.
The documents required for professional tax registration vary depending on whether you are registering as an employer or an individual. Here’s a comprehensive list of the documents typically needed for both types of registrations:
Note:The professional fees for Professional Tax Registration in Andaman and Nicobar Islands is ₹2000
Currently, Andaman and Nicobar Islands which is a Union Territory does not collect Professional tax, and thus, is one of the rare states in India that does not charge this tax. Professional tax, as it is named, is a state level tax that is mandatory in many states and union territories attracting people who are involved in various professions and trades. But in the case of Andaman and Nicobar Island it is not so and citizens and business men are not charged this professional tax that goes to meet the expenditure in other areas. This an exceptional loophole that gives persons and companies within the islands a qualitatively preferential financial consideration.
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
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As of now, the Union Territory of Andaman and Nicobar Islands does not collect professional tax on people or companies functioning in this area
Professional tax is a state tax levied on those who are engaged in any profession, trade or employment. As it has been made compulsory in most of the Indian states, it does not apply to Andaman and Nicobar Islands.
There is no professional tax for individuals in Andaman and Nicobar Islands which is beneficial to the residents as well as business organizations since it means that they are going to incur less expenses as compared to states where professional tax is mandatory.
No, even professionals working within Andaman and Nicobar Islands are also not required to pay the professional tax like the salaried individuals.
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