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Gujarat professional tax: Tax slab rate, applicability, and due date
In India, state governments impose professional tax on individuals who earn a regular income through various professions, trades, or employments. This tax is collected to generate revenue for the state and is used for developing the state's infrastructure. In the state of Gujarat, the process of collecting tax from professionals is governed by the Gujarat Professions Tax Act.
This article will dive deep into the applicability, rules, deduction cycle, and payment methods of professional tax in Gujarat and help you ensure compliance with the act.
Professional tax rules in Gujarat
Under the Gujarat Professions Act, individuals engaged in any form of work within the state are required to contribute a portion of their income as professional tax to the state government. The tax amount is determined based on the individual's income, with a maximum yearly payment limit of ₹2,500.
Employers in Gujarat have the responsibility to calculate their employees' tax liability by considering the appropriate slab rates. They must then deduct the corresponding amount from their employees' and remit it to the state's Commercial Taxes Department.
For self-employed individuals, it is their duty to accurately calculate the tax owed and ensure timely payment to the government.
Applicability of professional tax in Gujarat
The following individuals and entities fall under the purview of the Gujarat Professions Act.
- Salaried individuals: All employees working in an organization, whether in the private sector or for the state government, central government, or panchayats.
- Self-employed individuals: Freelancers and other individuals involved in any type of trade, profession, or calling except those who earn wages on a casual basis.
- Entities: Hindu Undivided Families, societies, clubs, or associations engaged in any type of profession.
- Businesses: Firms, companies, or corporate bodies operating in the state of Gujarat.
- Employers: Individuals responsible for disbursing employee salaries within an organization, including business owners, managers, and other stakeholders, must deduct the correct tax amounts from their employees' salaries and submit them on their behalf.
Registering businesses for professional tax in Gujarat
Employers and professionals (excluding salaried individuals and government officials) who need to pay professional tax must obtain a registration certificate and an enrollment certificate from the Department of Gujarat State Tax.
The registration certificate will have a unique professional tax registration number for your organization or business, while the enrollment certificate will indicate the tax amount payable by the employer or professional.
Documents required for registering
Here is a list of documents needed to obtain the registration and enrollment certificates, both online and offline:
- PAN card, Aadhar card, and passport size photographs of the applicant/partner/director.
- Certificate of incorporation, if applicable.
- Address proof of the business, such as a property tax receipt, or rental agreement.
- Photograph of the premises displaying the business signboard.
- Details of the employees and their salaries.
Once you have gathered all the necessary documents, you can choose to register either online or offline.
Professional tax offline registration process
- Download Form 1: Employer's Registration Form and Form 3: Application for a Certificate of Enrolment and fill in all the necessary fields.
- Submit both forms to the assessing authority of your division in person.
The assessing authority will take a minimum of one day to review and approve your application. Once it's approved, you will be able to download your registration and enrollment certificate from the Gujarat Commercial Tax website.
Professional tax online registration process
- Visit the official commercial tax website of the state government.
- Go to the Registrar of Firm & Professional Tax section and select the Professional Tax Registration for Employers option.
- Next, click the Application for new registration in Form 1 for Employer button on the subsequent page. This will redirect you to the Investor Facilitation Portal.
- Fill out all the required fields on the registration application displayed on the new page. Once done, click the Submit button to confirm your submission.
- Upon successful completion, you will receive an acknowledgement receipt. Make sure to take note of the application number for future reference.
For additional information, refer to the user guide on professional tax registration published by the Commercial Taxes Department of Gujarat.
Gujarat professional tax slab rates
For salaried individuals
| Monthly gross salary | Monthly tax amount |
| Up to ₹ 12,000 | Nil |
| ₹ 12,000 and above | ₹ 200 |
For certain categories of professions
| Tax assess category | Yearly tax amount |
| Legal practitioners, medical practitioners, professional consultants, chartered accountants, insurance agents, contractors, and driving school instructors | ₹ 2,500 |
| Tour operators, cable TV operators, film distributors, owners of advertisement agencies | ₹ 2,500 |
| ₹ 2,500 |
| Dealers as defined in the Gujarat Value Added Tax Act, 2003 whose annual gross turnover is: | |
| Nil |
| ₹ 2,500 |
| Holders of permits for transport vehicles granted under the Motor Vehicles Act, 1988. | ₹ 2,500 |
Gujarat professional tax payment process
Once you have determined the professional tax amount owed by you and your employees, it is important to deduct this specified sum and promptly submit it to the government.
If your organization has fewer than 20 employees, you can make the professional tax payment offline. However, if the number of employees exceeds 20, you are required to file e-returns by visiting the official website of your municipal corporation.
Professional tax offline payment process
- Download Form 5: Return Of Tax Payable By Employer and complete it by entering the employee details, the amount of tax payable, and the amount of tax deducted.
- Submit the complete form in person at your local municipal corporation office
Professional tax online payment process
Professional tax online is collected by the municipal corporations in Gujarat. There are eight municipal corporations in Gujarat; find the corporation to which you belong and visit their website to pay professional tax.
- Amdavad (Ahmedabad) Municipal Corporation
- Bhavnagar Municipal Corporation
- Gandhinagar Municipal Corporation
- Jamnagar Municipal Corporation
- Junagadh Municipal Corporation
- Rajkot Municipal Corporation
- Surat Municipal Corporation (SMC)
- Vadodara Municipal Corporation
The steps for paying professional tax may vary from one corporation to the other, but the information you need to successfully file returns is the same across the eight municipal corporations. With that in mind, here is the professional tax online payment process for Ahmedabad as an example.
- Visit the Amdavad (Ahmedabad) Municipal Corporation website.
- Navigate to the Quick Links section on the homepage and click the Pay Professional Tax button placed in the section.
- Enter your professional tax number on the subsequent Online Services page.
- Verify the details of your employees and the amount of tax owed. Select your preferred payment method and click Pay.
- Once the payment is made, a confirmation message and e-receipt will appear on the screen. Download the e-receipt for future reference.
Last date to pay professional tax
The deduction cycle and the last date to pay professional tax in Gujarat also depends on the number of employees in your organization.
| Number of employees in the organization | Deduction cycle | Last date to pay professional tax |
| Less than 20 | Monthly | By the 15th of the following month* (*If you have deducted professional tax from your employees' salaries in June, you must make tax payments before the 15th of July.) |
| 20 and above | Quarterly | Within 15 days from the end of the previous quarter.
|
Late payment penalty
If a registered employer or an enrolled person fails to pay the tax before the due date without a valid reason, they may be fined by the state's professional tax authority.
The individual will be required to pay a daily late payment charge and an annual interest of up to 18% on the total amount due.
Compliance forms for professional tax in Gujarat
| Form | Description |
| Form 1 | Employer's registration form |
| Form 3 | Application for a certificate of enrollment |
| Form 4 | Declaration to be furnished by an employee to his employer or employers |
| Form 5 | Return of tax payable by employer |
| Form 5b | Application for permission to furnish an annual return |
| Form 5c | Application for grant permission to file a consolidated return |
References
- https://commercialtax.gujarat.gov.in/vatwebsite/download/rule/Ptact.pdf
- https://commercialtax.gujarat.gov.in/vatwebsite/download/rule/Ptrules.pdf
- https://commercialtax.gujarat.gov.in/vatwebsite/download/Professional%20Tax%20Flow_24072017.pdf
- https://commercialtax.gujarat.gov.in/vatwebsite/download/PT/Guidelines_for_PT_Form_1.pdf
- https://commercialtax.gujarat.gov.in/vatwebsite/download/schedule/PT_Schedule.pdf