Legal Guide

Learn everything about Professional Tax Slab in Karnataka

by Bhavya Choudhary · 3 min read

professional tax slab in karnataka

Individuals with a gross yearly income of less than Rs. 2,50,00 are free from tax. As per the Professional Tax Slab in Karnataka, all people earning a monthly gross income of more than Rs. 15,000 are liable to a professional tax of Rs. 200.

The state government collects professional tax on the gross income from persons working as government workers or in private and non-government organizations (NGOs).

The imposed professional tax is as per Article 276, Clause 2 of the Indian Constitution, and it is applied when the yearly income of a person is over the minimum income. 

The Professional Tax Slab in Karnataka levied varied for all states. However, a state cannot impose a professional tax of more than Rs. 2,500 in a year. In India, a state may impose the greatest amount of professional tax as Rs. 2,500 in a year.

Professional Tax Slab in Karnataka 

As the professional tax assessed by each state varies, the highest amount that Karnataka state may levy is Rs. 2400.00 as a Professional Tax Slab in Karnataka. Moreover, the state may adjust the tax rates every year.

The Professional Tax Slab in Karnataka rates for the financial year 2018 -2019 are:

Who pays Professional Tax in Karnataka?

  • Individuals and businesses involved in any government or private profession, trade, vocation, or job are required to pay the professional tax as per the Professional Tax Slab in Karnataka.
  • Professional tax, which is collected by the Karnataka State Government, is necessary for both salaried and self-employed persons. Employers impose the professional tax on salaried workers as per work contract, whilst non-salaried professionals must pay it to municipal authorities designated to collect the tax as per the Professional Tax Slab in Karnataka. 
  • Karnataka imposes a professional tax on all individuals involved in private professions, including physicians, attorneys, and certified public accountants. One who has entered into any work contract and his earning salary is required to pay professional tax. 
  • Professional Tax Slab in Karnataka applies to the following categories:
    • In FY18-19, all salaried staff earning more than Rs. 15,000.00 will be subject to a Professional Tax Slab in Karnataka. The professional tax for a salaried employee will be withheld from the pay by the employer as per the Professional Tax Slab in Karnataka. 
    • Organizations such as: 
      • Sole proprietor 
      • Partnership businesses 
      • Limited Liability Partnership 
      • Corporations 
      • Hindu undivided family (HUF) 
      • Firms 
      • Company and other Corporate bodies 
      • Society 
      • Club or Association

How to Pay Karnataka Professional Tax?

  • Employers shall deduct professional tax according to the Professional Tax Slab in Karnataka from the monthly salaries of salaried people. 
  • This is deposited on behalf of the salaried employee to the appropriate state authority. 
  • Self-employed persons and professionals who do not get a salary, i.e., those who are not hired by an organization and work independently, are required to pay professional tax, which may be paid by contacting tax offices created in the state to collect professional tax as per the Professional Tax Slab in Karnataka.
  • Employers must register with the Karnataka state government in accordance with the professional tax requirements.
  • Here are the two registration types:
    • Employer professional tax (PT) registration
    • Registration of professional tax (PT) employees

Professional Tax Employer Registration

  • Registration as an employer is required for all companies and organizations. This registration is required regardless of the organization’s workforce. 
  • The certificate of registration given by the Profession Tax Office is the registration certificate.
  • This document specifies the tax owed by the employer and the date of payment. 
  • Failure to pay professional tax by the deadline may result in a penalty.
  • The Professional Tax Slab in Karnataka depends on the number of employed individuals. The following are the employer tax rates imposed under the Karnataka Shops and Commercial Establishments Act of 1961:
    • If there are no workers, there are no tax issues.
    • In between 1-5 workers – INR 1000.
    • Between 5 and 10 employees: INR 1,500
    • Beyond ten employees: INR 2,500.

Employee Registration for Tax Purposes

The employee’s professional tax is deducted by the employer as per the Professional Tax Slab in Karnataka. Employers must get the Certificate of Registration.

Monthly yields 

  • Employers must pay taxes in accordance with the Professional Tax Slab in Karnataka on behalf of their workers. 
  • The professional tax for workers with a gross monthly income of Rs. 15,000 or more is Rs. 200 per month within the Professional Tax Slab in Karnataka.
  • This must be paid on their behalf by their employers. 
  • The filing of tax returns must be completed within twenty days after the end of the month for which tax was withheld from the employee’s pay. 
  • Failure to comply may result in a monthly fine of Rs. 250.

Annual returns

  • Employers and enterprises holding an Enrollment Certificate must pay their annual taxes by the 30th of April, based on the specified tax rate. In addition, employers possessing the Enrollment Certificate must submit yearly returns within sixty days after the end of the fiscal year.
  • The forms must include all information on the salary paid to each employee and the professional tax withheld.

Karnataka Professional Tax E-Payment

  • It is easy and may be completed online. The state government of Karnataka has made it possible to pay taxes and file returns using a website called e-PRERNA. 
  • This online portal offers a variety of services, including enrollment application submission, e-payment of taxes, and return filing, among others. 
  • In addition, taxpayers may generate the same certificate online.

Karnataka Late Payment Penalty for Professional Tax

  • In the event of a delay in professional tax payment, the Karnataka state government would assess a 1.25 percent per month penalty. 
  • However, the state’s maximum penalty for late payment of the entire unpaid professional tax amount is fifty percent. 
  • It is thus recommended not to neglect to pay professional tax on time or to pay professional tax late and to consult a lawyer online

Conclusion

Unlike Income Tax, Professional Tax in India is a direct tax handled by the states and not the central government. Since Union territories are under the Central Government’s authority, they are free from the professional tax in India.

None of the nine union regions are thus compelled to pay. Moreover, the bulk of these establishments are rather small and contribute little to the economy; hence, they are exempt from this tax. To know more about Professional Tax Slab in Karnataka, consult a lawyer online now.

Payment of Professional tax is necessary if you reside in a state where professional tax is levied. To know more about Professional Tax Slab in Karnataka, consult a tax lawyer now.

Bhavya Choudhary

Written by

Bhavya Choudhary

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