Professional Tax

Every company which is engaged in any trade or professional should obtain a Certificate of Enrolment from the Profession Tax Officer of jurisdiction as per Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976. All companies with Enrolment Certificate shall pay tax every year before 30th of April.

In case of employees (salary or wage earners) whose salary for a month is not less than Rs. 15,000/-, the employer is liable to deduct Profession Tax and pay the same to the department.

It is the responsibility of the Company/employer to deduct tax and pay on behalf of all such employees within 20 days of expiry of the month.

Penalty 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.

 Here is an example:

Salary payable to employee is Rs 16,000. The company will pay is Rs 15,800 (16,000 minus 200) to the employee and professional tax of Rs 200 to be paid to govt before the 20th of Feb.