The State Governments in India have the authority to impose professional tax by enacting a law, however as per the law laid down by Indian Parliament, the maximum collection of professional tax from a taxpayer cannot be more than Rs. 2,500/- Per Year. However, such rates of professional tax may differ from state to state. Also, there are some states and union territories which do not impose professional tax.
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However, the state of Bihar imposes professional tax on carrying of certain kind of Profession, Trades, Calling and Employment, at the rate prescribed in the Schedule of rates under The Bihar Tax on Professions, Trades, Callings and Employments Act, 2011 on individuals and Some Categories of GST Registered Taxpayers. In this article, the details, and various aspects of professional tax in Bihar is discussed.
Professional Tax Applicability in Bihar
Professional tax is classified as a direct tax which is charged or imposed on all types of trades, professional and employment by the Government of Bihar at the same time, it is to be noted that any income earned by an individual from salary or any other professional including lawyers, doctors, chartered accountants etc. are subject to professional taxes in Bihar under the authority of The Bihar State Tax on Professions, Trades, Callings and Employment Act, 2011, came into force with an objective to levy professional tax on employments, trades and professions. The aforesaid act is applicable to the whole of the state of Bihar. The schedule of the Bihar Professional Tax levies the PT on the following four kinds of assesses.
| Section 4 (1) of the Bihar PT is reproduced hereinbelow for ease of reference. |
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4. Levy and charge of tax .— |
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| Taxable Persons Under Bihar PT |
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Salaried Individuals |
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Any Other Person Engaged in Trade or Profession, etc. |
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Transporters holding Permit. |
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Companies Registered in Bihar |
Professional Tax on Salaried Individuals:
Whereas the Professional Tax is levied on the salaried person, however section 5 of the PT Act of Bihar cast an obligation on the employer to register itself and collect the applicable PT as a deduction from the salaries of employees and make the payment of professional tax on behalf of the employees. Following is the Professional Tax on employment in the state of Bihar.
| S.No | Salary Range (Annual) | PT Amount (Annual) |
|---|---|---|
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1. |
Up to ₹ 3,00,000/- |
Nil |
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2. |
Between ₹ 3,00,001/- To ₹ 5,00,000/- |
₹ 1,000 |
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3. |
Between ₹ 5,00,001/- To ₹ 10,00,000/- |
₹ 2,000 |
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4. |
Above ₹ 10,00,001/- |
₹ 2,500 |
PT on Any Other Person Engaged in Trade or Profession, etc.
The other category of the taxpayer under the Bihar PT Act is every person engaged in any trade, Profession or occupation, the professional tax is levied based on the turnover of such a taxpayer. These taxpayers may be a Doctor, Chartered Accountant, Architect, or any other Professional, HUF, Firm, Company, Corporation, A Body Corporate, Society, Club, or an Association. However, there is no Professional tax on a person who earns wages on a casual basis. The professional tax is levied on other persons in three distinct manners.
- Tax Rate Based on Turnover of Tax Payers
| S.No | Turnover or Other Cri | PT Amount |
|---|---|---|
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1. |
Turnover Less than ₹ 10,00,000/- (Ten Lakhs) |
Nil |
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2. |
Turnover Between ₹ 10,00,001/- to ₹ 20,00,000/- |
₹ 1,000 |
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3. |
Turnover Between ₹ 20,00,001/- to ₹ 40,00,000/ |
₹ 2,000 |
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4. |
Turnover Above ₹ 40,00,001/- |
₹ 2,500 |
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5. |
Transporter - Taxi or Similar Vehicle |
₹ 1,000/- |
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6. |
Transporter - Bus or Truck |
₹ 1,500/- |
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7. |
The Companies registered under the Companies Act, 1956 or 2013 |
₹ 2,500/- |
Professional Tax Imposing Authority in Bihar
The Commercial Taxes Department which works under the governance of Government of Bihar is the tax imposing authority for professional tax in Bihar. According to the definition of professional tax, individuals who are engaged in any trade, profession or employment in Bihar must pay professional tax according to the income threshold limit as prescribed by the Commercial Taxes Department, Bihar from time to time.
Registration Under the Professional Tax in Bihar
In general, there are two major categories under which the professional tax is levied and collected, hence for a business there are two registration is applicable. While one is known as Enrolment with the PT Office where the taxpayer registered himself to pay the PT levied on such taxpayers. However, another category is where an employer seeks registration under the PT so that the PT Collected from the employee is deposited.
- Enrolment As Self-Assessable Entity Under the Pt Act. The schedule to the act provides for the tax on various kinds of professionals, traders, and other persons where the incidence of the PT falls directly on the business entity, for the purpose of payment of professional tax and furnishing of return such entities must obtain an Enrolment with the Professional Tax Department, within 7 days of applicability. The enrolment process is Online in the state of Bihar and the PT department issues a certificate known as Professional Tax Enrolment Certificate after processing of such application also known as PTEC in short.
- Registration As Employer Under Pt Act: Section 5 of the Bihar PT Act, casts an obligation on employer to register itself, collect and pay professional for and on behalf of the employees under the employment of such employer. For that purpose, every employer is required to obtain a Registration under the Professional Tax Act, the process is online in the state of Bihar and on approval of the registration application the PT Department issues a Professional Tax Registration Certificate, also known as PTRC in short. The application for registration to be made within 7 days of applicability.
Documents required for professional tax Registration in Bihar
An indicative list of documents that a Private Limited Company is required to submit for online registration under the professional tax in Bihar is as under. Please contact us for a complete list of documents as may be applicable for your business type. Here is the list of documents required for PTRC/PTEC
- Certificate of Incorporation
- Memorandum 0f Association,
- Articles of Association,
- PAN Card
- Address Proof of Company
- Bank Details of Company
- Director or Authorised Person Aadhar, Address Proof and Photo
- List of Employees along with the details of their salaries
Step Wise Process of Professional Tax Registration in Bihar
- Step 1: The Applicant must visit the official website of the Commercial tax department of the Bihar government. at https://www.biharcommercialtax.gov.in/bweb/. Locate the e-Registration option on the Right Menu as indicated in the picture below.
- When you click on e-Registration page it will take you to a page where different kinds of options are provided to seek online registration under various acts of the state of Bihar. Please select the “Professional Tax Registration” from the left menu as suggested in the below image.
- After you click on the Professional Tax Registration tab, it will take you to the next page where selection with respect to enrolment or registration is required to be made. Here is the picture of the page showing the appropriate options. As per PT Rules Registration Application as Employer/Deductor/Organisation is made in form PT-I and for Enrolment as Individual/Person/Professional the application is filed in the prescribed form PT-IA, However the applicant don’t have to worry about the form in the online mode of application.
- Follow the onscreen instructions and submit the application for the PT Enrolment or Registration with Bihar Professional Tax Registration. After the application is submitted successfully the applicant will receive an acknowledgement for the same which may look like the picture below. You can also track the progress of the registration application on the same portal.
- Application Fee for Professional tax Registration in Bihar: The Government of Bihar does not collect any sort of application fee or processing fee regarding registration of professional tax in Bihar. However, at the time of PTEC or PTRC the applicable Professional Tax has to be paid.
- Processing Time for Professional Tax Registration in Bihar: On submission of the online application, the PT Department will grant the Enrolment/Registration Certificate within fifteen days from the date of application, after verification of the form filled.
The Due Date for Paying Professional Tax in Bihar
In the state of Bihar, the due date for paying professional tax differs from entities to entities based on the enrolment date under the PT. If a person is enrolment before the commencement of the year or prior to 31st May, then in that case the due date will be 30th of June of the same year. If the entity is enrolled after 31st May, then the due date for professional tax payment will be within one month of the date of enrolment.
Penalty for Non-payment of Professional Tax in Bihar
In case the taxpayer fails to make the payment within the due date, the taxation authority can charge a penalty of not exceeding ₹ 100 for each month of delay. Please note any individual notwithstanding the provisions stated in the Bihar Professional Tax Act if fails to pay the professional tax, will have to pay penalty not exceeding ₹ 500. Further, if there is a continuous violation, then the individual has to pay for each day of such violation for not more than ₹ 10.
Process to Make Online Payment of Professional Tax in Bihar
The details of steps of how to make online payment of professional tax in Bihar has been explained below.
- Step 1 – Login into the official database or website of the Commercial Taxes Department, Government of Bihar and navigate into the home page.
- Step 2 – On the home page, select ‘e-Services’ which is featured on the rightmost corner, then select the option ‘e-Registration’. Start the registration process by providing relevant details. Once, the registration process is done. Go back to the home page again.
- Step 3 – On the home page, Select the option ‘e-Payment’ from the ‘e-Services’ column. Then, provide login ID (PAN) along with the State Code as prefix, mention the password and CAPTCHA and click on ‘Login’.
- Step 4 – After login into the account, click on the option “Professional Tax Payment” from the ‘e-Payments’ column which is featured on the leftmost side of the webpage.
- Step 5 – After clicking on the “e-payment” option, you can see a form filled with your relevant information. You can also add or modify the information as per your convenience. Next, choose the payment type, period of tax, payment form and financial year. Then check the box on the payment on Account ID and accordingly enter the tax amount payable.
- Step 6 – After entering the amount click on ‘Submit’. Now, your payment is done. A payment receipt will be generated on the page which can be downloaded for future references.
Frequently Asked Questions (FAQs)
Q1: Does a freelancer have to pay professional tax in Bihar?
Yes, a freelancer has to pay professional tax in Bihar.
Q2: Who is the professional tax imposing Authority in Bihar?
The Commercial Taxes Department, Government of Bihar is the professional tax imposing authority in Bihar.
Q3: Who Are Exempt from Payment of Professional Tax in Bihar?
The Members of the armed forces of the Union in service in Bihar and posted in any part of Bihar are exempt from paying professional tax in Bihar.
Conclusion
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