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- Key Highlights:
- Gujarat Professional Tax Act
- Applicability of Professional Tax in Gujarat
- Professional Tax Slab Rates in Gujarat
- Who Would Have to Pay Professional Tax in Gujarat
- The Process of Payment of Professional Tax in Gujarat
- Online Payment of Professional Tax in Gujarat
- Penalties for Late Payment or Non-payment
- Pay Your Professional Tax on Time
- FAQS - FREQUENTLY ASKED QUESTIONS
Key Highlights:
- Salaried individuals, self-employed professionals, and business owners must comply with professional tax in Gujarat.
- Professional tax in Gujarat is charged based on income brackets, with a maximum annual liability of ₹2,500.
- Gujarat has a seamless online portal for registration, payment, and return filing.
- Non-compliance results in penalties and legal actions from the state government.
Professional Tax (PT) is a state-imposed tax levied on a person earning an income by employment, trade, or profession. This tax in Gujarat applies to salaried employees, self-employed professionals, and business owners, depending on the respective income brackets. The employer will deduct and pay taxes from their employee's salaries, and self-employed professionals need to pay the taxes directly.Let's understand more about this tax so that you can file your returns correctly.
Gujarat Professional Tax Act
The Gujarat State Tax on Professions, Trades, Callings, and Employment Act 1976 is in place to be able to impose a tax on persons who are engaged in various professions, occupations, trades, and callings.The tax proceeds go to the benefit of the panchayat bodies, municipalities, municipal corporations, and the state itself. These taxes are levied by the concerned municipal corporations of Gujarat. Also Read - Understand the meaning of tax in our detailed guide
Applicability of Professional Tax in Gujarat
The tax applies to eligible taxpayers and is based on a slab rate determined from the income tax slab rates. It is chargeable to individuals who belong to one of the classes mentioned in column 2 of Schedule 1. Annual tax collection can range anywhere between ₹1250 and ₹2500 on any taxpayer.For salaried persons enrolled under this tax, the deduction will be made by their employer out of the person's salary or wage. Self-employed individuals are liable to pay the tax directly to the government of Gujarat.The accompanying documents for registration are as follows -
- MOA (Memorandum of Association)
- Articles of Association
- PAN Card
- Lease document
- Two passport-size photos
- Receipts of payment towards the Labour Welfare Fund (LWF)
- Company PAN Card
- Cancelled letterhead of the organisation
- Authorisation Letter
All documents should be signed and stamped by the owner or manager of the business.
Professional Tax Slab Rates in Gujarat
Professional tax in Gujarat has been fixed on a monthly income basis by the Gujarat government. Below is the latest slab rate applicable to different categories:
| Monthly Salary/Income (INR) | Professional Tax Payable (INR) |
| Up to ₹11,999 | Nil |
| Above ₹12,000 | ₹200 per month |
Note: The maximum amount of professional tax payable in a year is ₹2,500 per individual. Also Read - Understand the process of tax filing for partnership firms
Who Would Have to Pay Professional Tax in Gujarat
The individuals liable to pay professional tax in Gujarat are grouped below:
- Salaried Employees: Simply said, the employer deducts tax and deposits it with the Gujarat Commercial Tax Department.
- Self-employed Professionals: This category comprises doctors, lawyers, chartered accountants, and other professionals who are directly responsible for the payment of professional tax.
- Business Owners: An individual or an entity looking to earn also pays professional tax depending upon income.
The Process of Payment of Professional Tax in Gujarat
The payment process for professional tax depends on the type of entity making the payment. Here are the steps for different types of taxpayers: For Employers
- Registration: Employers shall register under the Gujarat Professional Tax Act via the official website .
- Tax Deduction: Employers shall deduct professional tax from the salary of employees as per slab rates.
- Payment: Payments shall be made online through the Commercial Tax Department's portal before the due date.
- Filing Returns: Monthly or annual returns, depending upon the taxpayer's liability, should be filed.
For Self-employed Individuals & Businesses:
- Registration: Self-employed professionals are to be registered on the respective official portal.
- Calculation of Tax: With the income generated, the tax due amount is then calculated according to slab rates.
- Online Payment: Payments can be made online on the website of the Gujarat State Government.
- Receipt Generation: The receipt of the payment will be downloaded and saved by the taxpayer for records.
Online Payment of Professional Tax in Gujarat
You can make an online professional tax payment from the corresponding Gujarat municipal corporation official site. Follow these steps for some of the major city corporations of Gujarat:
Professional Tax-Surat Municipal Corporation:
- Visit the Surat Municipal Corporation official website and under the ePay option.
- Click "Check & Pay Professional Tax" link from the "Professional Tax" column.
- Select the zone from the drop-down menu. Enter the captcha code and certificate number.
- Press the button to "Enter Pending Tax Amount".
- Lastly, choose online payment and select any payment gateway that you prefer.
Professional Tax-Ahmedabad Municipal Corporation:
- Visit the Ahmedabad Municipal Corporation official website and choose the payment option from a very quick pay link.
- Enter the professional tax number and click 'Search.'
- Finally, select the suitable payment gateway and the "Pay" option.
Professional Tax-Vadodara Municipal Corporation
- Visit the Vadodara Municipal Corporation official website and select the online payment option.
- Then, enter the PEC number and click "Search". After this, select your desired payment method by marking the check box.
- Next, click "Confirm" to complete the transaction.
- All details of the transaction will be shown on the screen. For further reference, click "Print receipt".
Professional Tax Deadlines in Gujarat
The professional tax deadlines are based on the number of workers in the organisation. They are as follows:
- If workers are less than 20, then PT is to be paid within 15 days after the end of the month
- If workers are more than 20, then Quarterly PT is to be paid, i.e., the 15th day of the month following the end of the previous quarter.
Exemptions from Professional Tax in Gujarat
Some individuals and categories are exempted from paying professional tax. The list of exemptions include:
- Armed forces
- Disabled persons (with a minimum of 40% disability)
- Parents of children with disabilities
- Senior citizens above 65 years
- Homemakers
- Any person who earns less than ₹12,000 a month.
Penalties for Late Payment or Non-payment
According to the Profession Tax Act, if you miss payment or do not pay on time, you will be subject to a daily late payment fee and an annual interest of 18% on the total amount due.
Pay Your Professional Tax on Time
Professional tax in Gujarat is a mandatory liability for those who earn greater than ₹12,000. Payment and filing by an employer or self-employed professional must be on time to avoid penalties. The online portal provides improved convenience and transparency to the payment process. The professional tax laws provide smooth functioning and legal compliance for businesses in Gujarat.
FAQS - FREQUENTLY ASKED QUESTIONS
Who is liable to pay professional tax in Gujarat?
Any salaried employee, self-employed individual, or business owner earning more than ₹12,000 a month will pay professional tax in Gujarat.
How is the professional tax collected?
In the case of salaried individuals, the employer will deduct professional tax from the wages or salary, while in the case of self-employed individuals, the right payment must be made through the Gujarat tax portal.
What is the maximum professional tax payable per year?
The maximum professional tax payable per year is not more than ₹2,500 annually.
How does one register for professional tax in Gujarat?
Registration can be done by going to the official website belonging to the Gujarat Commercial Tax Department and registering online by following the steps.
What is the penalty for professional tax not being paid?
Delayed payment will attract an annual interest of 18% on the total amount due, with further actions for fines or prosecution in cases of non-compliance.
Am I eligible to deduct professional tax while calculating my income tax liability?
Professional tax is included under Section 16 of the Income Tax Act, which treats it as a deduction.
Are there any other exemptions under professional tax?
Some exemptions are available under the professional tax for armed forces, the handicapped, respected citizens above 65, and people who earn less than ₹12,000 in a month.
Is professional tax applicable to freelancers?
Yes, if they are performing freelance work and earning above ₹12,000, they need to register and pay the tax.
What is the due date for professional tax payments?
The employer needs to give the dues monthly, and, in most cases, self-employed individuals will make their payments annually.
How can I receive my professional tax payment receipt?
Receipt will be available for download once the payment has been received by Gujarat Commercial Tax Department's official website.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
