Understanding Professional Tax in Telangana

• Professional tax in Telangana is a tax on salaried individuals, self-employed individuals, and business owners which is levied by the state government.
• Employers shall deduct professional tax for salaries and remit it to the government. Self-employed individuals must register and pay professional tax directly to the Telangana government.
• The professional tax can be remitted monthly, quarterly, or yearly, depending on the taxpayer's category.
• Non-payment of taxes within the due date attracts penalties or legal proceedings.

Professional tax is a state tax levied on all persons who make income through employment or profession. It is mandatory for all salaried individuals, self-employed persons, and business owners registered in the state. The professional tax in Telangana is controlled under Telangana State Tax on Professions, Trades, Callings, and Employment Act, 1987.This tax is a very important source of revenue and serves public welfare works. It is collected from salaries every month by the employer and paid into the state treasury; self-employed persons have to pay it directly by themselves. Let's understand more about it.

A professional tax in Telangana is a monthly tax determined by the income of an individual per month. Below are given rate slabs applicable:

Moreover, for self-employed professionals like chartered accountants, engineers, physicians, etc., the professional tax in Telangana shall be as follows:

• Nothing for the next five years
• ₹2,500 a year after five years

Various factors such as annual income and profession dictate the tax charged for enrolment. Also Read - Here's what you need to know about fringe benefit tax

Registering for the professional tax is mandatory for both employers and self-employed persons. Here's how to register for the same: For Employers:

• Step 1: Visit Telangana Commercial Taxes Department website.
• Step 2: Register under the "Professional Tax Enrolment" category.
• Step 3: Provide business details, employee details, and other required documents.
• Step 4: Upon approval, a Professional Tax Registration Certificate (PTRC) is issued.

For Self-employed Individuals:

• Step 1: Apply for the Professional Tax Enrollment Certificate (PTEC) online.
• Step 2: Provide the PAN, Aadhaar, and nature of the profession.
• Step 3: Send the application and receive the registration certificate upon verification.

The list of documents to be attached with the registration would include the following:

• Company's memorandum and articles of association
• PAN card
• The lease agreement
• Proof from the employer regarding the address
• Identification proof
• Photos
• The status of the board resolution for the authorised signatory
• The number of directors
• Photographs and proof of residence for the proprietors or managing partners, managing director, or authorised person
• The number of employees
• The registration fee of ₹2,500 for each director
• Bank details with a cancelled check.

Also Read - Know about the different types of income tax collected in India

The payment process for professional tax in Telangana is simple and can be done online. Here are the steps:

• Step 1: Visit the official website of Telangana Commercial Taxes Department to click on ‘e-registration’ under the subsection of New Dealer for new registration.
• Step 2: Choose "E-payment (all Acts)" under Existing Dealer for existing taxpayers.
• Step 3: A new window opens; select the type of tax.
• Step 4: Fill in the TIN/GRN, business name, reason for payment, and the kind of payment (monthly by employees or yearly by employers).
• Step 5: Moreover, fill in the payment date, the amount in rupees, and the period of tax paid.
• Step 6: Upon completing, click 'Submit' after this information is filled in and check if all the information is correct.
• Step 7: Select the mode of payment (Net Banking/Debit Cards/UPI).
• Step 8: Complete the transaction and download the payment receipt as your record.

An employer must make payment on or before the 10th of the subsequent month for salaried employees. For self-employed persons, the annual payment should be done on or before the 30th of April. Penalties for Non-compliance of Tax Payment in Telangana Penalties apply in cases of non-compliance concerning professional tax rules. Here are some things to know about penalties:

• Outright delay in payment before the due date may attract penalties.
• If the amount of professional tax due is more than 20%, heavy penalties will be imposed on late payment until the final payment is made.
• Non-payment: Heavy penalties and legal actions may be taken.
• False Information: Incidences involving false declarations would attract fines and could lead to registration being cancelled.

Exemption from the Payment of Professional Tax in Telangana Several categories of citizens in Telangana are exempt from professional taxes. These include the following:

• Individuals receiving an income of less than ₹15,000 in a month.
• Persons of and above sixty-five.
• People with disabilities.
• Badli workers in the textile industry.
• Parents of children with disabilities.
• Members of the armed forces serve within the boundaries of the state.
• Women working under the Mahila Pradhan Kshetriya Bachat Yojna or Department of Small Savings.

Professional tax is an obligation levied on all working professionals within the jurisdiction of Telangana. This is a bit tedious, as hardly any one of them would be aware of slab rates along with payment procedures and compliance.By knowing the slab rates of professional tax, you can pay your dues timely and avoid penalties. Professional tax is the responsibility of employers, self-employed persons, etc., hence registration, deduction, and payment of professional tax must regularly comply with the rules of the state. This enables you to manage your responsibilities and contribute to the development of the state.