Mr. Ravendra is an Operations Manager working in an MNC in Guwahati. As per the laid out regulations and law, his salary slip showed a deduction of a Profession Tax which he had no clue about. Here is what you all need to know about Profession Tax and the details of the Profession Tax Assam
Profession Tax is a direct tax imposed by the government on employees and freelancers. Profession tax is a source of income for the state government to support the implementation of programs for community welfare and development. Profession tax is a state tax and the tax rate varies from state to state which is allowed as a deduction under the Income-tax.
Profession Tax is quite nominal and the maximum amount that can be imposed by any state in India cannot exceed Rs. 2500. Let us find out more about Profession Tax Assam.
Table of Contents
- About Profession Tax Assam
- Who is responsible for deducting trade Profession Tax Assam?
- Profession Tax Assam Slab
- Registration of Profession Tax Assam
- Compliance with Profession Tax Assam
- Form Compliances under Profession Tax Assam
- Profession Tax Assam Exemptions
- Profession Tax Assam Penalties
- Key Takeaways
About Profession Tax Assam
Profession Tax Assam is applicable for all kinds of wage earners in almost all industries, for example, doctors, architects, engineers, managers, CAs, and even self-employed people. Regulated by the Assam Professions, Trade, Callings and Employments Tax, 1947, Profession Tax Assam is deducted at the source by the employer.
The Assam Professions, Trade, Callings and Employments Tax, 1947 was enacted in 1947 to impose taxes on occupations, trade, jobs, and employment. It covers the entire state of Assam levied by the state government on income from occupation or employment and is collected by the state's business tax authorities. The employer must withhold taxes from salary, pay the state government, and submit a tax return to the tax office within a certain period with a tax certificate in the prescribed format.
Other self-employed people or individual professionals can pay their taxes directly to the government, as required by profession tax Assam law. The amount of professional tax withheld/paid by an employee/freelancer varies from state to state. Profession tax is only levied in certain states. Some states and union territories do not collect this tax.
Profession Tax Assam applies to workers (employees) in almost every sector. The definition of a legal entity is broad and extends to the following organizations and groups:
- Corporate office
- Branches or Subsidiaries of Companies
- Associations and Clubs
- Hindu Undivided Family (HUF)
Who is responsible for deducting trade Profession Tax Assam?
The employer should register, deduct, and pay the government profession taxes on behalf of their employees and wage earners regularly. Any kind of failure to comply with the Profession Tax Assam will result in fines and penalties. If you are a self-employed professional or a freelancer, you are responsible for paying the profession tax. You must first register and receive a registration certificate from the tax office.
Profession Tax Assam Slab
Salary and wage earners whose monthly salaries or wages in INR per month
Tax Rate in INR per month
Up to 10,000
From 10,001 to 14,999
From 15,000 to 24,999
From 25,000 and above
Registration of Profession Tax Assam
Anyone who trades in whole or in part, or who seeks a profession, job, or employment, needs to pay the Profession Tax Assam unless otherwise provided by the notice of payment of such taxes. You are obliged to pay taxes for each fiscal year concerning profession, trade, job, or employment.
The current profession tax rate is Rs. 250 per year for the lowest income group and Rs.2500 per year for the highest income group. Obtained from Assam PT rules.
Rules And Regulations/ Guidelines Under The Profession Tax Assam
Step 1 - Application for a registration certificate under Section 5A (1) shall be made using Form I. Applicants who have workplaces in the jurisdiction of different valuation authorities must apply individually to each of these authorities to register their work in that authority's jurisdiction
Step 2 - Upon receipt of the registration application, the Examining Authority shall determine whether the application is correct and if the applicant has provided the necessary information, before issuing a Form IA registration certificate to the applicant
Step 3 - If the Examining Authority determines that the application is not complete or has not provided the information required for registration, the Examining Authority should submit a revision application or provide the necessary additional information to the applicant
Step 4 - After reviewing the revised application or additional information as needed, the evaluator will issue a registration certificate from IA
Step 5 - Application for registration certificate according to Section 5A (2) must be submitted using Form II. Applicants with multiple locations in the federal state will only be issued a registration certificate
Step 6 - If the applicant has multiple locations in the state, the applicant must make a single application for all of those locations, and the application will state these purposes. You need to specify one of those places of work as your primary place of work. Then submit the request to the assessment body in the responsible area where this major workplace is located
Step 7 - Upon receipt of Form II's application, the assessing authority requires the applicant to provide additional information or evidence necessary to determine the tax amount to be paid by the applicant by the table attached to the law
Step 8 - After reviewing the application and additional information or evidence, the valuation body will issue a Form IIA registration certificate
Step 9 - If the applicant has more than one place of work, in addition to one copy of the main place of work, the same number of copies of the certificate as the other places of work must be handed over by the applicant
Step 10 - If the holder of a registration certificate issued under this provision wishes to amend the certificate, he will submit a Form I application to the Approval Authority for that purpose and such amendment. The desired details shall be stated and the reason for this, along with the certificate of registration, should be submitted
Step 11 - After a rigorous review, the evaluator can make any changes it deems necessary in the certificate of registration if it is satisfied with the given reason
Step 12 - Registration certificates issued by this Rule are valid unless revoked by Section 13 of the Profession Tax Assam act
Step 13 - The application for a change of registration certificate must be submitted to the assessment body using Form II. Upon receipt of such application, the valuation authority will provide additional information or evidence necessary to determine the amount of tax the applicant should pay and determine the amount of tax the applicant should pay based on the table of the law
Step 14 - The tax authorities will make the necessary changes to the registration certificate under the signature of the date to indicate the year in which the tax will be paid at the changed tax rate
Step 15 - A registration certificate issued under this provision may be revoked by the valuation authority after it is confirmed that the employer to which the certificate was issued is no longer the employer
Step 16 - A registration certificate issued by this provision may be revoked by the valuation body after confirming that the registrant has died or that his tax obligations have expired
Step 17 - Registration certificate owners are required to present the registration certificate at work
Step 18 - If a registration certificate or registration certificate issued by these rules is lost, destroyed, or unrecognizable, the owner of this certificate will apply to the valuation authority for a copy of this certificate. After performing the necessary checks, a copy of the original certificate is issued to the certificate owner, and the copy issued in this way is marked as a "duplicate copy"
Step 19 - The certificate that must be provided to the employer under the second booking in Section 5 using Form IIB or IIC in some cases
Compliance with Profession Tax Assam
The Notification Commissioner issues a public notice annually (if already registered or registered) by posting it in a newspaper instructing all taxable persons and employers to register under the Profession Tax Assam law.
- All employers must file and pay taxes by the law and the provisions of this Rule
- All employers registered under the law must submit a monthly tax return on Form III on the last day of each month or earlier, showing salaries and wages paid and tax paid in the previous month of the month
- Monthly declarations for April, May, and June must be submitted by July 31, during the fiscal year beginning April 1
- Before filing by a registered employer - If you submit a tax return required under subrule (1), you must pay the Treasury the full amount of tax payable by the tax return
- Regardless of what is contained in subsection (1), a registered employer shall, upon applying to a rating agency, file a quarterly, a semi-annual, or annual declaration on Form IIIA by the following conditions -
- The employer must pay the Ministry of Finance within 30 days of the start of the quarter, half-year, or year including the filing period, equal to the tax amount shown in column 3 of the wage annex. Based on the salary rate stipulated by law, he is entitled to pay his employees during this period
- Form III Declaration must indicate salary and wages paid by the employer for a period that includes a quarter, semester, or year, before the last day of the following month in which the period is required. If the profession tax Assam paid under the tax return is greater than the tax prepaid under item (a), the employer will pay the unpaid balance before filing the tax return as specified in subrule (2)
- If the amount of profession tax Assam paid in advance under clause (a) is greater than the amount paid under the declaration, the employer shall file a tax return indicating the overpayment amount
- The employer may deduct the tax amount from the employee's salary or wage only if the employee has paid the same amount
- If the employer violates any of the above conditions, the assessing authority will revoke the approval granted under this rule after giving the employer a reasonable opportunity to hear. The employer may then be subject to the provisions of subrule (1)
Form Compliances under Profession Tax Assam
The Profession Tax Assam is enacted under the Assam State Tax on Professions, Trades, Callings and Employment Act, 1947 (“Assam PT Act”) to levy tax on professions, trades, callings, and employments in the state of Assam – Certain forms regarding specific compliances as stated under the Profession Tax Assam rules are as follows:
- Form I - Application for Certificate of Registration / Amendment of Certificate of Registration
- Form IA - Certificate of Registration
- Form II - Application for a Certificate of Enrolment / Amendment of Certificate of Enrolment
- Form IIA - Certificate of Enrolment
- Form IIB - Certificate to be furnished by a person to his employer
- Form IIC - Certificate to be furnished by a person who is simultaneously in the employment of more than one employer
- Form III - Return
- Form IIIA - Application for permission to furnish returns covering a quarter, six months, or a year
- Form IV - Statement of Recovery
- Form V - Information to be furnished
- Form VI - Notice to a defaulting enrolled person
- Form VII - Notice for showing cause against non-enrolment
- Form VIIA - Assessment Order
- Form VIIB - Notice of Demand
- Form VIIC - Challan
- Form VIICC - Challan
- Form VIID - Assessment Register
- Form VIII - Refund Voucher
- Form IX - Refund Register
Profession Tax Assam Exemptions
Profession tax Assam does not apply to the following groups of people:
- People who have reached the age of 60
- People with 40% and above permanent disability or blindness
- Parents or legal guardians of children with physical or mental disabilities
Profession Tax Assam Penalties
If you are late in receiving your registration certificate, employers are forced to pay Rs. 5 as a penalty every day of delay, and the self-employed need incur to incur an Rs. 2 penalty.
- If payment is delayed, a contractual penalty of 2% per month will be imposed
- If you do not pay such taxes, you will be charged an additional 10% of the tax amount
- Delays in filing a tax return will result in a penalty of Rs 1,000 if the tax return is filed within one month of the due date. If not paid within one month, a penalty of 2,000 rupees will have to be paid
- If you provide false or inaccurate information at the time of registration, you will be fined three times the Profession tax
Profession Tax Assam is a tax levied by the Assam state government on employees working in government or non-governmental organizations, as well as professionals such as accountants, doctors, and lawyers engaged in all forms of business. The relevant provisions of Article 276, Paragraph 2 of the Indian Constitution apply and in the state of Assam, this act is administered under the Assam Professions, Trade, Callings and Employments Tax, 1947.
The profession tax rate varies from state to state, but the maximum amount of business tax paid should not exceed Rs. 2500. The total amount of profession tax Assam paid in one year is considered a deduction from income tax.
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- The Profession Tax Assam comes under the Act, and Rule of The Assam Professions, Trades, Callings And Employments Taxation Act, 1947
- The applicability of the Profession Tax Assam is any person or employer who is eligible to play under the act
- The employers need to register for the profession tax Assam using Form III, Form IIIA, and Form VII
- The registration process of filing for Profession Tax Assam is offline
- A list of documents that should be submitted by the employer for registration include:
- Memorandum Of Association
- Articles Of Association
- PAN Card
- Lease Agreement
- VAT Registration copy
- Employer Address Proof and ID Proof and photos
- No of employees
- Employer Address Proof and ID Proof and photos
- The website you can refer to regarding Profession Tax Assam is http://www.tax.assam.gov.in/AssamTimsInfo/
- The Rates of Profession Tax Assam are:
Up to 10000
Between 10001 To 15000
Between 15001 To 25000
- The Due Date for Filing Of Returns is:
Last Date Of Filing Returns
PT Remittance And Monthly Return
Every month on day 28