Professional Tax Registration Certificate and Compliance in Delhi

Professional tax is a direct tax levied on persons earning an income by either practicing a profession, employment, calling, or trade. Unlike income tax imposed by the Central Government, professional tax is levied by the government of the state or union territory in India. In the case of salaried and wage earners, the professional tax is liable to be deducted by the Employer from the salary/wages, and the same is to be deposited to the state government. In Delhi, professional tax is governed by the Uttar Pradesh state tax rules. The tax calculation and amount collected may vary, but the maximum limit is Rs. 2500/- per year.

Professional Tax Applicability in Delhi

This tax is levied on all kinds of professions, trades, and employment. Profession tax is applicable to the following classes of persons in Delhi:

• An Individual
• A Hindu Undivided Family (HUF)
• A Company/Firm/Co-operative Society/Association of persons or a body of individuals, whether incorporated or not
• The professionals earning an income from salary or other practices such as a lawyer, teachers, doctors, chartered accountants, etc. in Delhi are required to pay professional tax.

Professional Tax in Delhi (Uttar Pradesh)

In Delhi, professional tax is governed by the Uttar Pradesh state government. The tax is applicable to individuals and entities earning an income through salary, wages, or professional practices. The exact tax slab and collection process may vary based on income and occupation.

Professional Tax Rate in Delhi

The maximum amount payable per annum towards professional tax in Delhi is INR 2,500. The professional tax is typically calculated based on the monthly income or salary, with specific tax slabs outlined by the Uttar Pradesh government.

The Uttar Pradesh Commercial Taxes Department is responsible for collecting professional tax, and the amount may differ depending on the annual taxable income of the individual or business. Professional tax in Delhi can be paid either monthly or annually based on the employer or self-employed person's preference.

Who Pays Professional Tax in Delhi?

In Delhi, salaried and wage earners are subject to professional tax, which is typically deducted by the employer from the salary/wages and paid to the Uttar Pradesh state government. If you are self-employed or a business owner, you are responsible for paying your professional tax to the relevant authority.

Employer’s Responsibility for Professional Tax in Delhi

The owner of a business in Delhi is responsible for deducting professional tax from the salaries of employees and paying the amount to the Uttar Pradesh state government. The employer must also file a return with the tax department, submitting proof of tax payment to avoid penalties.

Exemptions for Payment of Professional Tax in Delhi

Certain individuals in Delhi may be exempt from paying professional tax under specific conditions, such as:

• Parents of children with permanent disability or mental disability
• Members of the armed forces
• An individual suffering from a permanent physical disability (including blindness)
• Women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana
• Individuals aged 65 years or above

Professional Tax Registration Certificate in Delhi

Tax registration for professionals in Delhi is mandatory within 30 days of employing staff in a business or, in the case of professionals, 30 days from the start of the practice. If you are setting up a business in Delhi, it is essential to apply for a professional tax registration certificate from the Uttar Pradesh tax department.

Due Dates for Professional Tax Payment in Delhi

Employers in Delhi who have more than 20 employees must make the professional tax payment within 15 days from the end of the month. If the employer has fewer than 20 employees, payment must be made quarterly, by the 15th of the next month following the quarter's end.

Professional Tax Return in Delhi

All individuals and entities subject to professional tax in Delhi must file a professional tax return with the Uttar Pradesh state government. The due dates for filing returns may vary, and it's important to ensure timely submission to avoid penalties.

Benefits of Professional Tax Registration in Delhi

• Simple compliance with professional tax regulations in Delhi ensures smooth registration and operations.
• Timely payment of professional tax helps avoid penalties and legal complications in Delhi.
• Professional tax contributes to the development of Delhi through state welfare schemes funded by tax revenues.
• Employers and self-employed individuals can claim deductions on the professional tax already paid in Delhi.

Documents required for Professional Tax Registration in Delhi

• Certificate of Incorporation / LLP Agreement
• MOA and AOA
• PAN Card of Company/LLP/Proprietor/Owner/Director
• NOC from the landlord, where the business is situated
• Passport size photos of Proprietor/Owner/Director
• Address and identity proof of Proprietor/Owner