11 points to know about Karnataka Profession Tax

Karnataka Profession Tax (PT) shall be paid by every establishment or factory, club or society, self-employed or professional, government or private sector employees serving in the State of Karnataka. Most important provisions of Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976 are listed out below. Hope this helps.

 

  1. Online Filing facility – Karnataka Profession Tax registration, payment of tax dues and returns are done online through the portal e- prerana of Commercial Taxes Department. Every employer or establishment required to obtain registration shall within 30 days from the commencement of his profession or trade apply electronically (online) for registration. 
  1. Employees who are not covered – Salary or wage earners whose salary or wage (gross) for a month is less than Rs.15,000/-, are not covered under Profession tax. (those who are drawing over Rs.15000 salary per month have to pay Rs.200 pm) [READ: Major modifications in Karnataka commercial taxes with effect from 1st April 2015]
  1. Additional fee for branch – Every branch of a firm, company, corporation or other corporate body, any society, club or association is treated as a separate person for the purpose of tax liability. 
  1. Responsibility of the Employer to remit – It is the responsibility of the employer to deduct tax and pay on behalf of all employees within 20 days of expiry of the month (means on or before 20th of the subsequent month). Profession Tax towards the salary shall be deducted and paid on monthly basis. 
  1. Payment of PT by professionals and establishments – Other than employees, all other class of persons such as professionals, companies, societies shall pay tax once in a year on or before 30th of April. 
  1. Penalty for non-compliance – Penalties under the Act includes (a) Rs.1000 for non-registration in case of employer and Rs.500 in case of others (b) Rs.250 for non-filing of returns and (c) for non-payment of tax by enrolled person and registered employer with interest at rate of 1.25% per month and Penalty not exceeding 50% of the tax amount due. 
  1. Tax on Legal Practitioners – Legal practitioners including solicitors and notaries public are exempted from payment of profession tax for the first 10 years of their practice. 
  1. Tax on Other Professions – Other professionals including doctors, chartered accountants, technical consultants, engineers, are exempted from payment of profession tax for the first 2 years of their practice. (Subsequently the tax ranges from Rs.1000 to Rs.2500 depending upon the number of years of service) 
  1. Others who have to pay taxes – Insurance agents, real estate agents or brokers, contractors, directors, actors, playback singers, petrol bunk owners, hotels, taxi owners (other than auto rickshaws), beauty parlours, nursing homes, travel agents, journalists, tutorials, marriage halls, courier agencies, event organizers, Yoga centres, parking place contractors, etc., are covered under the provisions of profession Tax.    
  1. Senior Citizens are exempt – No profession tax is payable by persons (either employed or self-employed) who have attained an age of sixty (60) years 
  1. Others who are exempt – Certain categories of persons like person having single child, physically handicapped person, combatant member of armed forces etc. are also exempted by virtue of notification issued by the Government.

 

Download THE KARNATAKA TAX ON PROFESSIONS, TRADES, CALLINGS AND EMPLOYMENT ACT, 1976

 

Thought for the day

Ego must go. How high you go. Stay low.

 

 

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About B E Kumar Prasad

B E Kumar Prasad
He is a Practicing Chartered Accountant in Bengaluru, India. He has 25+ years of experience in income tax, business setup, and NRI matters. He is also an Insolvency Professional and Registered Valuer (F&SA).Prasad welcomes your comments and questions. Please email him at [email protected]

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Heera
Heera
2021 years ago

Hi
We are employer of firm from last 2year we did not pay professional tax which we deducted from staff salary & not done professional tax registration.

Mampi
Mampi
2021 years ago

Our company has paid PT advance payment for 3 months now while filling the PT how shall I adjust the same, please reply asap.

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