All about Professional Tax Compliance for Start-ups
What is a professional tax?
Ad Valorem is the tax levied for carrying on a profession, as the law covers occupation or trade within the meaning of profession tax. Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Meghalaya, Orissa, Tamil Nadu, Tripura, and West Bengal are the states in India imposing a professional tax. Every start-up shall apply for professional tax registration to the appropriate authority.
The taxing power is divided between the State and the Centre by the Constitution of India. Item number 60 of List II (the “State” List) brings “taxes on professions, trades, callings, and employments” under the authority of the state and municipal bodies. Thus the Profession Tax paid is to the State Government’s consolidated fund. The...