Professional Tax- Resigned Employees

Dear All,

We are Design Consultants and we want to know about Professional tax. We have not been registered for Professional tax since we started the firm in the year 2010.

What is the procedure for registration for PT and payment of arrears (due)? Is it necessary to pay for the resigned employees as well, or is it only for the present employees who are currently working? What is the penalty that has to be paid along with the professional tax? We were not aware of it, and we received a notice to pay the Professional tax recently.

If present employees have been working for a period exceeding 3 years, what is the penalty that has to be paid for those employees?

We have had our Service Tax registration since the year 2010.

Our major doubt pertains to the resigned employees since we did not deduct any tax from the salary paid. There are also a few employees who worked for less than 6 months. What needs to be done in that case?

Moreover, there is a lack of proper details regarding the Professional tax anywhere. Please assist us with the information and your suggestions.

Thanks in advance.

Which state are you in?

As a general rule, all businesses need to pay professional tax:
- for all employees (every month)
- for partners/directors (once a year)
- for the company/firm (once a year)

The amount is payable from the time the business starts. So, if you have received a notice, you will need to pay with retrospective effect. You will need to pay even for those who have left and those who worked even for a month. However, in Maharashtra, you do not need to pay for those whose salary is less than ₹7500 per month. Each state has its own slabs.

You can go to the concerned officer and speak to them. Generally, they will be willing to negotiate the penalty and even offer a staggered payment option against some under-the-table cash. If you are not comfortable dealing with such matters, ask a consultant to assist you. Thereafter, ensure you pay on time.

Dear Mr. Pra,

Mr. Banerjee has provided a clear explanation for your query, and I agree with his suggestions. As rightly pointed out by Mr. Banerjee, you have not stated the state from which your company belongs and its location. The professional tax is determined by the state government and varies from state to state; it is not uniform across all states of India. We have consistently advised all our readers and writers to present genuine facts and provide us with complete details and feedback to assist us in addressing your query more effectively.

Adoni Suguresh
Sr. Executive (Personnel, Administration & Industrial Relations) Retired
Labour Laws Consultant