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Professional tax is levied by, not all, but some of the State Governments on all individuals who earn a living through any source especially salaried employees and professionals including chartered accountants, doctors, freelancers, etc. subject to monthly salary amount exceeding the PT limit if any. This is a tax that is to be paid by every single earning individual and professional tax is not the same as income tax but it is an important component of your tax obligation. The calculation and amount collected may vary from one State to another State wherever it is applicable but it has a limit of Rs. 2500 per year.
Professional Tax is one source of revenue for the Government and is used towards bettering the services of professionals in that State. Anyone who renders professional services in any of the States where it is applicable, Professional Tax is levied as a direct tax on persons earning an income by way of either practicing a profession, employment, calling or trade levied under Article 276 (2) of the Indian Constitution. Most of the Indian states levy Profession Tax like Karnataka and Maharashtra have Profession Tax, but there is no such tax applicable in Delhi and Haryana. Since States are independently empowered to levy Profession Tax, the rate of professional tax varies from one State to another State. Each of the States, mostly opt for any of the two options where it charges as a percentage value or some other states tend to charge it as a fixed amount based on income slabs. The appearance of Professional Tax (PT) is visible in the payslips/Form 16 issued to salaried employees as a deduction from their salary income. The taxpayer is eligible for an income tax deduction for this payment.
The process starts with employers having to apply for the Registration Certificate of their respective State Tax Department within 30 days of employing the staff. In case the offices are located in multiple states or places, application for the Registration Certificate has to be done separately to each authority with respect to the place of work that falls under the jurisdiction of that particular authority. The Commercial Tax Department is responsible for the collection of Profession Tax to ultimately ensure that it reaches the fund of municipality corporation.
If there is an occurrence of non-payment of Profession Tax or due to some reason, there is a delay in payment, then there is a process of levying penalty or penal interest that may depend on the respective State’s legislation, and therefore a penalty may be levied by all such states for not registering once professional tax legislation becomes applicable in any particular State. Besides these penal provisions, there are also penalties for failing to make the payment within the due date and also for neglecting to file the return, knowingly or unknowingly within the specified due date. Karma Management Global Consulting Solutions Pvt Ltd., the global giant consultant firm of governance and convenience offers the proper maintenance of all state-based professional taxes and issue the ones best suited for respective individuals.
Karma is always in quest for accurate and perfect task accomplishment and these are the very two things that every client expects from the consultants they are partnering with. Karma Management Global Consulting solutions Pvt. Ltd. believes in excellent customer services and thus with this background of being in the service of clients for decades, it has been able to harness loyal customers for life. This excellent service has come about only through a genuine desire to delight your customers.
Karma believes in the policy of aiding customers and guiding them right up to the point of solving their problems and providing choice solutions which we are very well known for. It is this value of ensuring that customers have a good experience that has kept Karma steadfast in its growth and service over the years. Karma works with clients in person, over the phone, or online through email or chat services and these are the kind of skill sets that our client's value which has enabled Karma to grow in leaps and bounds.
The ultimate focus strategy of Karma is to explore the distinctive features of services because recognition of these special characteristics, provides us with insights for enlightened and innovative management of services to our valuable clients who have been with us for years have successfully gained their trust by offering them unique solutions, something which they have never imagined.
It thus becomes significant to meticulously manage these extensive Professional Taxes and, inevitably, this tedious process cannot be done manually, because if done so it is guaranteed to be full of errors. Our State of the Art tool, which is developed in house by increased collaboration, speed up design convergence, backed by innovation, gives our tool the flavor of an AI-powered design software system called WE CHECKED which provides a full-proof solution to our clients where their PTs are deducted accordingly, thus adhering to the labour laws with exposure to a chatbot for instant resolution of queries.
Our process, our very own in-house tool, is a combination of speed, accuracy, and design that converges on the easy-to-use software application that capably maintains all the different slabs of the Professional Taxes and caters to both small and medium and large clients. This tool, therefore, brings out the clutter-free and user-friendly interface which is flexible as an important management tool with an intuitive UI. This cloud-based solution enables businesses to file their professional taxes better and faster with full retention of confidentiality.
Karma provides its employees with training that gives our staff the tools they need to carry good service throughout the entire customer experience.
Along with the caliber of our tools supporting the PT compliance process, Karma emphasizes the abundant need of responding quickly. There may be nothing so irritating than facing blank non responsiveness by a customer who is trying to get help, resolve an issue, or find out more about what is the status of his work. It is therefore important to respond quickly to all inquiries, even if it is only to say you are looking into the issue and will be back in touch. Some response is always better than none so the customer doesn't feel ignored which has been our motto with all of us.
Challenge- An organization was having Head office at Mumbai location and employees in different States. The client was having a single PT code for the PT contribution of all the employees under the Head office state.
Solution- We as a compliance consultant, suggested the client to contribute the PT of employees in the respective states.