How Should We Handle Professional Tax Deductions for Branches Outside Karnataka?

We have centralized payroll based in Karnataka, with branches located all over India. Currently, we are not deducting Professional Tax (PT) except for the Karnataka and Hyderabad branches. Could you please advise on the procedure to deduct PT for all other branches, or should we follow the process as done in Karnataka?

Regards,
Sathish

I believe you are the payroll guy, and you should know that PT is a state act. The PT slab varies from state to state. If you don't have registration for any state where your employees are working, and PT is applicable in those respective states, this is a very serious offense. It may attract a huge penalty amount and legal action against the company for failing to comply with the laws.

Therefore, first, register under the respective states and start contributing the amount to the PT account of those states to avoid any controversy in the future.

We would like to share the status regarding Tamil Nadu.

Profession Tax Deduction in Tamil Nadu

In Tamil Nadu, you need to deduct the Profession Tax once every 6 months. There are two half-yearly periods in PT for the calendar year April to March. The first half-year period is from April to September, which is required to be paid in the month of September. The second half-year period is from October to March, which is required to be paid before the end of March.

As far as Tamil Nadu is concerned, PT has to be deducted as per the slab rate of the respective Corporations/Municipality/Panchayat. The rate of PT will differ from Corporation to Corporation. Based on the location of your branch office, you need to deduct the payment and remit it.

Before proceeding with the remittance, you have to register your establishment, and a unique registration code will be allotted to your establishment for Employer and Employee Remittances.

Pragnaa shall support you in registering your establishment and arranging for the remittance of PT. If you are seeking professional support, please feel free to write to us.

Regards,
Pragnaa

There are states where there is no PT, e.g., Haryana and Delhi. First, you have to find where the tax is applicable, then determine the amount, periodicity, and other formalities like registration, filing reports, etc. Also, identify the place where the tax has to be deposited and act accordingly.

As mentioned above, you have to check the applicability of Professional Tax in all the states where your branches are situated. Get the registration done and deduct the Professional Tax as applicable for the employees of that state.