Professional Tax Karnataka: Tax Slab, Payment, Applicability, Due Date, Exemption

• A compliance-friendly Professional Tax in Karnataka has only two slabs.
• Employers must remit their payments every month, while self-employed individuals remit once a year.
• Online payment and return filing of Professional Tax in Karnataka can be done simply through the e-PRERANA platform.
• Penalties are charged for late payment of Professional Tax in Karnataka, and failure to pay can also result in legal action being brought against the defaulter.

Professional Tax, or PT , is a direct tax imposed by the respective state governments on persons whose income is generated from either employment or self-employment. In Karnataka, it is governed by the Karnataka Tax on Professions, Trades, Callings, and Employments Act, 1976. The revenue earned through PT is solely utilised for the growth of the state through development programs and infrastructure projects.Every individual, whether in employment or self-employed, must comply with professional tax laws if their income exceeds a certain amount. It is the employer who is responsible for withholding PT and remitting it to the state on behalf of the employee, while professionals in self-employment pay PT on their own.In this blog, you'll learn all about professional tax in Karnataka, including the stakeholders involved, the payment procedure, penalties for non-compliance, etc. Also Read - Know about the marginal tax rate in India

The Karnataka government levies a professional tax by grouping employees' income into several slabs. The rates are pretty straightforward and are outlined as follows:

A few takeaway points of professional tax in Karnataka:

• Employees earning less than ₹25,000 a month are exempt.
• An effective flat PT of ₹200 is imposed on employees earning above ₹25,000.
• Self-employed individuals, including doctors, lawyers, Chartered Accountants, etc., must also conform to the same slab structure.

It can be regarded quite simply compared to many other states. There are only two slabs, making compliance much easier for employers as well as individuals in Karnataka. Also Read - Know the meaning of tax liability

The Karnataka government levies professional tax on all its citizens, whether self-employed or salaried. While non-paid professionals pay the administration designated for the function, the employer collects it in the case of salaried employees.In India, private professionals, including doctors, lawyers, chartered accountants, etc., are required to pay professional taxes. These are the categories of professional tax applicable in Karnataka: Employees on Monthly Salaries Professional tax is deducted from the salaries of employees by their employers every month, and it is remitted to the state government. Self-employed If registered, self-employed individuals, such as doctors, lawyers, accountants, freelancers, and consultants, must pay professional tax.

All limited liability partnerships and private limited companies are required to comply on a self-assessment basis as per the professional tax laws according to their nature of operations and number of employees. Associations, societies, and clubs are also included. Payment Procedure for Professional Tax in Karnataka Professional Tax in Karnataka is collected in the following ways depending on the category of employment: For Employers - Salaried Employees (Professional Tax Registration-PTRC) Employers are liable to deduct from the salary of their employees and deposit it in due time annually. If the salary exceeds ₹25,000, then all establishments with a PT-RC have to deduct ₹200 per month.Here's a step-by-step guide to help you:

• Step 1 - Use your user ID and password, which were based on the PAN/TAN as in the New RC request, to log in to the official website of the Commercial Taxes Department Karnataka.
• Step 2 - Next, click 'File return' and select 'Return period type', 'Year', 'Month', and 'Return type', and hit 'Next'.
• Step 3 - After you have entered the employee count, click on 'Make E-Payment' in the 'E-Services' menu and press 'Pay'.
• Step 4 - From the 'E-Services' menu, click 'Submit', then click 'Add CTD Reference Number'. After that, you will have to click 'Verify and Submit'.
• Step 5 - Open 'E-Services' and select 'View/Print Returns', then select 'View/Print' for the month desired to either print or download Form 5A.
• Step 6 - Employers should maintain their PT assessment and remittance records adequately to avoid penalties.

For Self-employed Professionals and Businesses (Professional Tax Enrolment-PTEC) Self-employed professionals must pay their professional tax online on the official site of the Karnataka Commercial Taxes Department. Moreover, all businesses registered under the GST Act must pay the tax on the same site.Following are the steps for conducting the professional tax enrolment of an establishment:

• Step 1 - Go to the official site of the Karnataka Commercial Taxes Department . If you do not have a login, click on 'New Enrolment' and register using your GSTIN or by selecting 'Self-employed' to sign up for the professional tax department.
• Step 2 - Log into the platform using your user ID and password, which would have been provided to you during registration for new enrolment with PAN or GSTIN.
• Step 3 - Open the dashboard; select 'Make PT Payment' and the return period, and click the submit button. This will open a payment window, where you will have to submit ₹2,500 (along with no other company locations).
• Step 4 - Online returns filing, payment and compliance are made through the e-PRERANA portal .

The following is the deadline for tax payment:

• Professional Tax Enrolment (PTEC) :  30 April each year, the commencement of the fiscal year.
• Professional Tax Registration (PTRC) :  20th of the next month.

Penalty for Non-Compliance Non-compliance with the professional tax laws will subject to heavy penalties, such as:

• Other than 1.25%, there will be an additional late payment charge a month on the amount that is due on account of tax liability.
• Non-Filing Penalty : An additional fine is incurred by an employer who fails to file returns on time.
• Legal Proceedings : Continuous non-compliance may lead to legal action on behalf of tax authorities.

Below are those entitled to exemption from Professional Tax in Karnataka :

• Independent contractors working up to or not more than 120 days in a fiscal year.
• Employees who get gross salary of less than ₹25,000 a month.
• Persons who are senior citizens aged 60 years and above will not be liable to pay professional tax.
• Blind persons, deaf persons, dumb persons, and persons with a minimum of 40% permanent disabilities.
• Persons who are serving in the armed forces, including Army, Air Force, and Navy personnel.
• Foreign technicians working in the state of Karnataka.

Pay Your Professional Tax and Comply with the Rules To lower your aggregate tax liability, use effective tax planning tools. These tools can help reduce your tax outgo and enhance your savings.