Professional Tax Karnataka: Tax Slab, Payment, Applicability, Due Date, Exemption

Professional tax is a kind of tax levied by the state government on salaried or self-employed individuals. As per Clause 2 of Article 276 of the Indian Constitution, it is applicable to all kinds of professions, employment, and traders in the particular state. Only 17 states impose a professional tax in India, and Karnataka is one of them. This article details professional tax in Karnataka, including its slab rates and related information. In this article we will explain about:

• Professional tax in Karnataka
• Professional tax slab in Karnataka
• Applicability of professional tax in karnataka
• Steps for Professional tax enrollment
• Professional tax exemption in Karnataka
• FAQs

Recent Update 

As per a new amendment in Karnataka Tax on Professions, Trades, Callings and Employment, Act 1976, effective from 1st April 2023, every person liable to be registered under GST will have to apply for PT-EC (Profession tax Enrollment Certificate).

Professional Tax In Karnataka

The Karnataka state government is responsible for collecting professional tax, depending on your gross income. Whether you are working in a private organisation or are associated with a government entity, it is mandatory for all individuals to pay professional tax in Karnataka.

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.

Karnataka Professional Tax Act

The Karnataka Tax on Professions, Trades, Calling and Employment Act 1976 has laid out the provisions for professional tax payment within the state. As per the Karnataka professional tax rule, the government levies this tax on an individual depending on their income. So, if you are a working professional in Karnataka, knowing the tax slab rates is crucial.

Professional Tax Slab In Karnataka

Here’s a table for a complete understanding of the professional tax slab rate in Karnataka for salaried individuals. 

On the other hand, as per the Karnataka Professional Tax Act, Establishments are required to obtain professional tax enrollment on an annual basis by paying fees of Rs. 2500 (For each such location). It is imperative for all businesses and employers to make payments on or before April 30 every year. Also, the rule requires employers with an enrolment certificate to file an annual return within 60 days of the financial year closure. 

Professional Tax Applicability In Karnataka

From the above information, it is evident that individuals earning Rs 25,000 or more are eligible to pay professional tax in Karnataka. If you are a salaried individual, the employer will deduct a certain amount and deposit it to the state government. 

There are two categories of professional tax in Karnataka, as follows;

1. Professional Tax Enrollment (PT-EC)

Professional tax enrollment is an annual tax liability paid to the Karnataka State government. Following establishments are requirements to enroll and pay professional tax. 

a. Persons registered or liable to be registered under the Karnataka Goods and Services Act, 2017.

b. Self-employed persons engaged in Professions, Trades, Callings, and Employments, who have been in the profession for more than 2 years.

c. Employers of establishments defined under the Karnataka Shops and Commercial Establishments Act, 1961, employ more than five employees. 

2. Professional Tax Registration (PT-RC) 

Professional tax registration is applicable to employees at the establishment level. Here the employer will deduct Rs 200 per month if the salary being paid to the employee exceeds Rs 25,000. 

Furthermore, professional tax applicability in Karnataka extends to certain categories, including corporations, firms, societies, Hindu Undivided Families (HUFs), clubs or associations, companies and other corporate bodies.

Steps For Professional Tax Enrollment (PT-EC)

Every establishment registered under the GST Act is liable to apply for this and pay the tax before 30th April the beginning of the financial year. The steps to make Professional Tax Enrollment for establishment are as follows.

• Visit the official website of the Commercial Taxes Department Karnataka. If you don’t have a login, then you can click on new enrollment and register based on your GSTIN or as Self-employed

• Log in to the portal with your user ID and password, which are based on the PAN/ GSTN registered in New Enrolment.

• On the dashboard, select Make PT Payment 

• Select the return period and click on submit then enter the Amount Rs.2500 (Without any additional place of business) proceed to make e-payment. 

• Finally you can print the certificate from the option ‘Print Certificates’

Professional Tax Payment Online In Karnataka For Salaried Individual

All Establishments that have a Professional tax registration certificate (PT-RC) will have to deduct Rs. 200 per month if the salary being paid to their employees exceeds Rs 25,000 here is a stepwise guide for you.

• Visit the official website of the Commercial Taxes Department Karnataka and login to the portal with your user Id and password based on the PAN/ TAN registered in New RC request. 

•    Click on ‘file return’ then select Return period type, Year, month and Return type after that press ‘Next’.

• After entering the number of employees ,Select ‘Make e-payment’ from the e-service option and click on ‘Pay’

• Select the ‘Submit’ option from the E-Services and click on Add Ctd Reference number once it is validated then press the ‘Verify and submit’.  

• To print/download Form 5A, Select ‘view/ print returns’ from the ‘e-services’ option, then select ‘View/ Print’ for the relevant month. 

Karnataka Professional Tax Payment Due Date

Due date for tax payment is as follows

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.

Karnataka Professional Tax Exemption

Here are the individuals who do not need to pay professional tax in Karnataka: 

• Self-employed individuals who have not served as an employee for more than 120 days in a financial year.
• Salaried individuals with a monthly gross income of less than Rs 25,000 per month.
• Senior citizens above 60 years are eligible for professional tax exemption.
• Blind, deaf and dumb individuals or people diagnosed with nearly 40% of permanent disabilities. 
• Members of the Armed Forces, such as the Army, Air Force and Navy.
• Foreign technicians employed in the Karnataka state.

Final Word

As per the Karnataka Tax on Professions, Trades, Calling and Employment Act 1976, all individuals with a monthly gross income of Rs 25,000 or above are liable to pay professional tax in Karnataka, and working professionals are also liable to pay professional tax in Karnataka. To avoid any penalty charges, always pay your professional tax responsibly and within time.

Related Articles 

1. Professional Tax in Maharashtra
2. Professional Tax in West Bengal
3. Professional Tax in Delhi
4. Professional Tax in Telangana
5. Professional Tax in Gujarat
6. Professional Tax in Bihar
7. Professional Tax in Jharkhand
8. Professional Tax in Odisha
9. Professional Tax in Tamil Nadu
10. Professional Tax in Punjab
11. Professional Tax in Kerala
12. Professional Tax in Assam
13. Professional Tax in Andhra Pradesh