Professional Tax Enrollment Certificate and Professional Tax Registration Certificate basically termed shortly as PTEC and PTRC are certifications that are required to conduct any kind of business in different states of India which are namely Punjab, Uttar Pradesh, Karnataka, Bihar, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Gujarat, Assam, Kerala, Meghalaya, Odisha, Tripura, Madhya Pradesh, Jharkhand and Sikkim.

The registration process and regulation of both PTEC and PTRC differs from state to state. A legal entity needs to have both the certifications to conduct a business. The basic function of a PTRC is that it allows an employer to deduct professional tax from its employees’ salary and deposit for the same. PTEC on the other hand is where the employer has to pay its professional tax as well as all of its employees according to the law and both are submitted to the Commercial Taxes Department of State Government.

In some cases, where the company does not have any employees who are paid salaries, they only require a PTEC and not a PTRC. This is applicable for professional practitioners such as Doctors, Advocates, Chartered Accountants and Architects, as these professionals have their own registered practices and may not have employees working for them who meet the criteria of Professional Tax.

Ho to apply for PTEC & PTRC?

As mentioned above the regulation of PTEC and PTRC is different from state to state and also the process of registration for certificates may differ but there is a common process in every state that the filing of the form for the certification must be made electronically to a website. After the submission of the form, a confirmation of the form submission should be downloaded and after that, it should be attached with the other required documents like Copy of the PAN Card, Proof of Constitution of Business, Latest Electricity Bill of the register Office, Proof of Residence of the Director, Partner, Proprietor, e-mail id and phone number of the assessee, a Blank Cheque, Establishment Certificate and also the PAN and PTEC details of the Partners as well as Directors (if any) and at last the number of employees and their salary slabs.

How PTEC and PTRC are granted?

After the submission of the application with all the documents attached and if those are correct the Registering Authority generates a TIN after verification. And as soon as the verification is done and the application is stated to be eligible for the grant of registration, the date of the Registration Certificate will be determined by the date of uploading of documents which is considered as the date of application for the RC. After this, the Certificates will be sent via e-mail or post and the applicant needs to visit The Commercial Taxes Department of State Government for procurement of the certificates received and the same would be made digitally available on the portal from where it can be downloaded with the Digital Signature of the certifying authority.

What happens if an application for PTEC & PTRC is rejected?

If the application is found to be defective or improper a defect memo is then issued and the same is sent via e-mail to the applicant and needs to be rectified within 30 days. And if the applicant rectifies the defects in the documents within 30 days and the verifying officer finds it satisfactory the TIN will be generated. After this, the first application date will be taken into consideration of determining the effective date of RC.

And if the defects in the effect memo are not rectified by the applicant within 30 days the application will be rejected and the temporary profile that was made will be deactivated after 90 days and the application has to be done all over again.

Some Exemptions from Professional Tax:

1. People above 65 years of age are exempted.
2. Women who are salaried up to Rs.10000/month are exempted
3. Members of textile industries who work as Badli workers
4. Members of armed forces of union serving a state.
5. Armed members of the Central Reserve Police Force to whom the Central Reserve Police Force Act, 1949 applies and to the Border Security Force to whom the Border Security Force Act, 1968 applies and are serving in the state of Maharashtra are exempted.
6. Parents of kids with disabilities (blindness, mental retardation, or any physical disabilities) are exempted.
7. Professionals who are working and are earning for the first year of their profession are exempted(for ex: CA, Medical Practitioner, Tax Consultants, Legal Practitioner, etc are not liable)

Benefits with returns and OTPT Scheme

• Any registered employer needs to make payments in Challan Form No. MTR-6 and has to furnish the return in Form-III B. In case of any failure to upload the return within the due date, the employer may attract penalties. And if the tax has been paid within the due date, a grace period of 10 days is provided to upload e-return. If there is a late in the payment a late fine of Rs.1000/- needs to be paid.
• An employer with PTRC can file a revised return within a period of 6 months from the end of the year.
  • If Tax liability during the previous year was less or not more than Rs.1,00,000
    • The Annual Return on or before 31^st March of the year( For the salary paid for the months from 1^st March of immediately preceding year to 28^th February of the current year)
  • If Tax liability during the previous year was more than Rs.1,00,000
    • Monthly returns on the last day of the month that covers the salary paid for the immediately preceding month
• Every registered employer of PTRC TIN should pay taxes as per due dates before filing the returns
• The facility of e-payment of professional tax is available since 2012

ONE TIME PAYMENT OF TAX SCHEME

From 1^st April 2018, a new One Time Tax Payment Scheme as introduce where:

1. Under Section 8(3) of the Act, a PTEC holder can avail the benefits of this scheme. As per the new scheme a person can discharge the liability for a minimum of 3 years and maximum up to 35 years by making payments in advance as mentioned in the notification.
2. Any PTEC holder who has already paid the same for 5 years prior to 2018-19 can also avail the OTPT scheme after the completion of 5 years.
3. No refund can be availed once the amount is paid under this scheme.

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