Updated on April 02, 2025 06:47:46 PM
Professional tax is a tax which is levied at the state level and is paid by a person who is engaged in profession, trade, calling or employment. Held in Delhi, its legal standing is defined by the Delhi State Tax on Professions, Trades, Callings and Employments Act, 1975. The main objective is to produce vital revenues for the local authorities and the state government through funding and provision of services and state infrastructures. This tax is applicable to all fields of employment such as; physicians, attorneys, entrepreneurs, corporate workers, and more, so that all may provide for the funding of local and state projects. Employers are under legal obligation to deduct the professional tax and pass on to the government from the wages paid to the employees. On the other hand, the self-employed are on their own when it comes to registration and payment. General register, documents which are required and what forms must be filled in, are of great importance for counsel as far as registration is concerned. Also, understanding of the current fee policy and the possible consequences that may occur in case of violation of the fee policy rules, would contribute to the minimization of legal troubles and losses. In following these regulations, different industries and all people help in the states’ development and enhance the society’s well-being hence the need for efficient and effective professional tax management.
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 to several parties involved, especially the employer and the employees since it is legal and has practical values. Below are some benefits of professional tax registration:
Online registration of Professional Tax In Delhi is possible through the official site of Delhi Commercial Taxes Department. Below is the process to be followed while registering for Professional Tax in Delhi:
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 Delhi 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:
The professional tax in Delhi is structured based on income slabs:
| Monthly Gross Salary | Amount Payable as Professional Tax |
|---|---|
| Up to ₹50,000 | Nil |
| ₹50,001 to ₹75,000 | ₹100 |
| ₹75,001 to ₹1,00,000 | ₹150 |
| Above ₹1,00,000 | ₹200 |
Note:Professional fees for Professional Tax Registration is ₹2000
Failure to register or pay the professional tax on time can lead to a significant penalty of 1.25% per month may be imposed for late payments.
In Delhi, these taxes are known as the professional tax and are controlled according to the Delhi State Tax on Professions, Trades, Callings and Employments Act, 1975. It seeks to generate revenue towards local and state development through assessing to charge professionals, trades and employment. This tax is paid through the deduction of wages while for the self employed people they have to do it on their own. It involves filling of forms with relevant documents online with the Delhi Commercial Taxes Department and the user receives the Taxpayer Identification Number (TIN) and certificate of enrolment. It is important to follow the registration rules, the fees schedule and payment due dates in order not to be penalized.
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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Employers as well as self-employed are required to pay professional tax. Such taxes are paid through the payroll system, meaning that the employers are supposed to deduct the tax amount from the employees’ wages while the self-employed people are supposed to register for the tax and do it themselves.
To register, an employer completes Form I while an individual applies using Form II within one calendar month of being liable to pay the tax. This can be done online through the Delhi Commercial Taxes Department’s website. After submission, a TIN number will be given and a certificate of enrolment shall be issued.
Any delay in registration or in payment of professional tax will attract a penalty of 10% of the total amount of Professional Tax and a penalty of ₹ 300 as well.
Professional Tax Certificate is Permanent until it is canceled. It doesn’t have an expiry date but must be renewed or updated if there are changes in business details or address.
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