How do we know if our organisation has to pay Professional Tax?

Code of Taxation
1

We are a non-profit and not sure if we need to register for Professional Tax or deduct it from our staff salaries. How can we check if it applies to us? Are the rules different in each state?

2

Professional Tax is a state tax on employment, profession, trade or callings carried out in a state and is applicable to a charitable institution as an employer. PT is not applicable in states of Delhi, UP, Rajasthan, HP, Uttaranchal, Arunachal Pradesh and Haryana.

Since PT is a state tax, please read carefully the relevant Act for rates of tax, deposit of PT and any exemption in concerned state. Professional Tax Registration has to be obtained and PT is to be deducted by an employer from employee salary and deposited with the concerned department of the state. PT will have to be deposited by the employer or organization also. If you have multi state operations, PT registration for each state would be required.

Thanks

CS Sharad Bhargava

3

If my Section 8 organisation is registered in Madhya Pradesh and hiring people on consultant basis only. Should I still need to procure professional tax registration?

4

Professional Tax is to be deducted by employer from employee wages and deposited with concerned department handling PT Act in that state. Consultants are outside purview for an organization since there is not employer employee relationship. Consultant will deposit PT applicable to him/her directly after obtaining PT registration.

CS Sharad Bhargava