Professional Tax – Karnataka
Professional tax in Karnataka is a tax levied by the state government on salaried and self-employed individuals. It’s a state-level tax, and 17 states in India impose it, including Karnataka.
The Karnataka Tax on Professions, Trades, Callings, and Employment Act, 1976, governs professional tax in Karnataka. The tax applies to various professions, trades, and employments, including government and private sectors.
Who needs to pay Professional Tax?
Professional tax is collected by the Karnataka state government based on your gross income. Everyone in Karnataka is required to pay professional tax, regardless of whether they work for a government agency or a private company.
Additionally, self-employed individuals, doctors, chartered accountants, lawyers, etc., must pay this tax to the local authorities assigned to collect the professional tax. On the other hand, the respective employers levy professional tax in Karnataka for salaried employees.
According to the rules and regulations of professional tax registration in Karnataka; an employer requires obtaining two types of registration
- Enrollment Certificate(EC)
- Registration Certificate(RC)
However, this depends on whether or not an employer has employed workers or not. EC is required for the employers and RC is required for the employees. The detailed procedure for registration is given at the end
Professional Tax Slab In Karnataka
Here’s a table for a complete understanding of the professional tax slab rate in Karnataka for salaried individuals.
Monthly Salary Range | Amount Payable per Month |
Rs 1 to Rs 24,999 | 0 |
Rs 25,000 and above | 200 Rs. |
Professional Tax on Company, LLP, GST Registered Taxpayers, etc.
The Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976, has a schedule that lists the different professions and the corresponding annual professional tax that taxpayers in Karnataka are required to pay.
You can refer to the official schedule (pt amendment bill.pdf) of Karnataka Professional Tax for a complete list of details.
However, the table below provides a simple summary for easy understanding.
S.No | Category of Taxpayer | Professional Tax (Annual) |
1 | Separate Legal Entities 1.Companies 2.LLP 3.Partnership Firm 4.Trust 5.Society |
₹ 2500 |
2 | GST Registered Taxpayers | ₹ 2500 |
3 | Employers of establishments defined under the Karnataka Shops and Commercial Establishments Act, 1961, employing more than five employees. |
₹ 2500 |
Professional Tax Registration for New taxpayers
As per the proviso of Section 3(2) of the Karnataka Tax on Profession, Trades, Callings and Employments Act, 1976, a person is not liable to pay any tax if the duration of their engagement in the profession, trade, appointment, or employment does not exceed 120 days in a given year.
Table of Due Dates of Karnataka Professional Tax
SL No | Particulars | Details |
1 | Time limit to apply for Enrollment (PTEC) | Within 30 Days of Incorporation or Starting the business. |
2 | Time limit to apply for Registration (PTRC) as an Employer | Within 30 days from the date of becoming liable to pay tax (PTRC) |
3 | Due Date for Payment of PTEC | 30th of April every year |
4 | Due date of PTEC Return | 30th of April every year |
5 | Due Date for Payment of PTRC | 20th of every succeeding month |
6 | Due Date for Monthly PTRC Return | 20th of every succeeding month |
7 | PTRC Annual Return | Within 60 Days of end of FY (30th May) |
Karnataka Professional Tax Late Payment Penalty
- The Karnataka state government levies a penalty for late payment of professional tax. A penalty of 1.25% is imposed in such cases.
- The maximum penalty applicable is 50% of the total outstanding amount. (When the person has made the payment before the demand notice is served.)
- (3A)[ When making an assessment under sub-section (3) the assessing authority may also direct the employer or the person, as the case may be to pay in addition to the tax assessed a penalty equal to the amount of tax assessed under sub-section (3).] [Inserted by Act 18 of 1994 w.e.f. 1.4.1994]
- 7(4) The amount of tax so assessed I[or the amount of penalty so levied] [inserted by Act 18 of 1994 w.e.f. 1.4.1994] shall be paid within fifteen days of receipt of the notice of demand from the assessing authority.
- 7(5)If within one month from the service of a notice of demand under sub-section (4) the [employer or person] [Substituted by Act 18 of 1994 w.e.f. 1.4.1994] satisfies the assessing authority that he was prevented by sufficient cause from getting himself registered or, from filing the return under section 6 [or from getting himself enrolled under section 5] [Inserted by Act 18 of 1994 w.e.f. 1.4.1994], as the case may be, the assessing authority shall cancel the assessment made under sub-section (3) and proceed to make a fresh assessment in accordance with the provisions of this section as the circumstances of the case may warrant.
