Profession tax registration under Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976

Profession tax is levied under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976. Profession Tax shall be paid by every person exercising any Profession or engaged in any trade or holding any appointment in the State of Karnataka.

I run a proprietorship, should I get registered under Profession Tax?
Yes. Any person including professional, proprietor, firm, company, corporation, society, club or association is covered under Profession Tax Act.

If we operate our business from two places (one as branch), should I get separate registration for the branch?
Every branch of a firm, company, corporation or other corporate body, any society, club or association is treated as separate person for the purpose of tax liability. So, there is no separate registration, but for each branch tax to be paid separately.

I am working as an employee in a company. Should I also get registered under Profession Tax?
An employee is not required to register under Act. However, if the salary of the employee is more than Rs.15000 per month, then the employer has to deduct Rs.200 from the salary of employee and remit to the department.

As a practicing doctor, should I pay profession tax?
Professionals such as doctors, lawyers, architects, engineers, etc., are covered under Profession Tax Act. They have to register under the Act and pay taxes annually, on or before 30th April at the rates specified in the schedule of Profession Tax. The rate depends upon the nature of profession and the year of service.

I am a director in a company. Should I register under Profession Tax?
A director or a partner of the firm is covered under the Act, but needn’t register themselves. It is the obligation of the company or a firm to pay taxes for directors/partners annually.

Whether Senior citizens are exempted from profession tax?
No profession tax is payable by persons who have attained age of sixty five years. This apart, certain class of persons such as charitable and philanthropic hospitals, blind/deaf and dumb employees, physically handicapped persons, etc., are also exempt from profession tax.

Is there any penalty for non-registration?
Yes. Penalty for non-registration ranges from Rs.500 to Rs.1000. Similarly, non-filing of annual return and non-payment of tax attracts penalty and interest.

In case you need our help in profession tax matters, please feel free to contact us on [email protected]

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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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