Professional Tax in Karnataka

Professional Tax in Karnataka - An Overview

Profession Tax is levied by the state government which is applicable to salaried employees and individuals. Employees working in an organisation or establishment such as a factory would also have to go for the registration process of professional tax in Karnataka.

Registration of Professional tax in Karnataka is mandatory for the business within 30 days of employing staff and for professionals within 30 days of starting their practice. The professional tax has to be deducted from the salary/wages paid. However, the amount of professional tax varies from state to state which is capped at Rs. 2500 per annum. If you have employees in more than one state then in each state professional tax registration is required to be obtained.

Who Regulates Professional Tax in Karnataka?

In Karnataka professional tax is governed by the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976. If the employee and professional have a monthly income of more than the limit prescribed then they have to pay professional tax in Karnataka India. Professional tax payment can also be made online.

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Eligibility Criteria for Registration of Professional Tax in Karnataka?

  • If the salary of the wages of the employee earned is more than Rs. 10,000/- per month then the employer has to mandatorily go for the process of professional tax registration in Karnataka.
  • The employer in such circumstances would be liable to deduct some amount of wages under this act.
  • Before expiry of 20 days of the month, the employer is liable to deduct the professional tax.
  • If the threshold or the amount of professional tax payable in Karnataka is lesser than Rs. 5000/- per month then the employer can opt for the payment of professional tax within 20 days of the expiry of the quarter of the year.
  • All employees have to obtain a professional tax registration certificate from the concerned officer.
  • All individuals or professionals are liable to register for professional tax. Individuals who are enumerated in Sl. No.2 to 74 of the Schedule (Annexure 1) shall obtain a Certificate of Enrollment from the Profession Tax Officer.

Professional Tax in Karnataka - Exemptions

For the following below mentioned individuals, professional tax in Karnataka would not be payable:

  • Senior Citizens are exempt from paying professional tax.
  • All charitable and philanthropic hospitals or nursing homes situated in all the districts in places below the taluk level except Bangalore and Bangalore Rural District.
  • If you are a director of a company registered in Karnataka and simultaneously nominated by the financing agencies which are owned or controlled by the State Government or by other statutory bodies.
  • Such foreign technicians who are employed in the State and their appointment is approved by the Government of India for the purpose of tax exemption for the defined period (exemption for a period of 2 years from the joining date).
  • Professional tax in Karnataka is also exempt for the members of the Armed Forces who are governed by the Army Act, the Navy Act, and the Air Force Act.
  • Blind persons earning salaries and wages.
  • Deaf and dumb persons, earning salaries and wages.
  • Single taxi or single three-wheeler goods vehicle permit holders.
  • Institutions which are involved in teaching Kannada or English Shorthand or Typewriting.
  • A Physically handicapped person who must not have less than 40% of permanent disability (subject to production of a certificate from the HOD of Government Civil Hospital).
  • If you have a single child and has undergone sterilization operation, however, production of a certificate from the District Surgeon, Government Civil Hospital is mandatory.
  • Central Para-Military Force (CPMF) Personnel.
  • If an educational institution is carried by you in respect of their branches teaching classes up to 12th standard or pre-University Education.