Compliance with Professional Tax (PT) Act in Bangalore

Compliance with Professional Tax (PT) Act in Bangalore

Compliance with Professional Tax (PT) Act in Bangalore
In Bangalore, like in many other Indian states, the Professional Tax (PT) Act plays a crucial role in revenue generation and ensuring compliance among professionals and businesses. PT is a state-level tax levied on income earned by individuals engaged in professions, trades, callings, and employments. This comprehensive guide aims to delve into the nuances of the PT Act in Bangalore, elucidating its provisions, compliance requirements, and implications for professionals and businesses operating in the region.

Understanding Professional Tax (PT) Act:
Professional Tax is a tax levied by state governments in India. It is governed by the Professional Tax Act, which varies from state to state. In Karnataka, including Bangalore, the Karnataka Professional Tax Act, 1976, regulates the imposition and collection of professional tax. The Act mandates individuals engaged in professions, trades, callings, and employments to pay tax based on their income slab.

Applicability and Scope:
The applicability of PT in Bangalore extends to all individuals, including employees, professionals, and business owners, whose income falls within the purview of the Act. Employers are responsible for deducting PT from their employees' salaries and remitting it to the state government within the stipulated time frame. Additionally, self-employed professionals and businesses are required to register themselves and pay PT directly to the tax authorities.

Registration Process:
For employers, registration under the PT Act is mandatory upon employing eligible individuals. The registration process involves submitting an application along with relevant documents to the Profession Tax Officer (PTO) within the prescribed time frame. Failure to register or delay in registration can attract penalties and interest as per the provisions of the Act.

For self-employed individuals and professionals, registration is compulsory upon commencement of their professional activities. They need to obtain a Certificate of Enrollment (COE) from the PT department and display it prominently at their place of business.

Calculation and Payment of Tax:
The PT amount is calculated based on the income slabs defined in the Act. The Act specifies different slabs and corresponding tax rates applicable to individuals based on their income levels. Employers are required to deduct PT from employees' salaries on a monthly basis and remit the collected tax to the state government treasury.

Self-employed individuals and businesses are responsible for determining their tax liability based on their income and paying it directly to the tax authorities. They must file periodic returns and make timely payments to avoid penalties and legal consequences.

Compliance and Enforcement:
Compliance with the PT Act is essential to avoid legal repercussions and penalties. The tax authorities conduct regular inspections and audits to ensure compliance among employers and professionals. Non-compliance, including failure to register, late payment, or underpayment of tax, can result in penalties, fines, and even prosecution under the provisions of the Act.

Employers are required to maintain accurate records of employees, salaries, and PT deductions to facilitate smooth compliance and audit processes. Any discrepancies or irregularities can lead to adverse consequences during inspections or audits.

Challenges and Issues:
Despite the regulatory framework in place, certain challenges and issues persist regarding PT compliance in Bangalore. These include:
  1. Lack of awareness among professionals and businesses about PT obligations.
  2. Complexities in calculating tax liabilities, especially for businesses with diverse income streams.
  3. Difficulty in enforcement and monitoring due to resource constraints faced by tax authorities.
  4. Instances of tax evasion and non-compliance by unregistered professionals and businesses.
Addressing these challenges requires collaborative efforts from the government, tax authorities, professional bodies, and stakeholders to enhance awareness, streamline processes, and strengthen enforcement mechanisms.

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

  1. 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 Bangalore is one of them. This article details professional tax in Bangalore , including its slab rates and related information.

Professional Tax in Bangalore 

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

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

Professional Tax Slab In Bangalore

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

Monthly Salary RangeAmount Payable per Month
Rs 1 to Rs 9,9990
Rs 10,000 – Rs 14,9990
Rs 15,000 and aboveRs 200
On the other hand, as per Bangalore professional tax act, the amount of tax payable by an employer who is established as per the Bangalore Shops and Commercial Establishment Act, 1961, is as follows:
Number of employees in the organisationTax Rate 
Between 1 to 5Rs 1000
Between 5 to 10Rs 1500
Higher than 10Rs 2500
As per the tax slab, 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 Bangalore
From the above information, it is evident that individuals earning Rs 15,000 or more are eligible to pay professional tax in Bangalore . If you are a salaried individual, the employer will deduct a certain amount and deposit it to the state government. 

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

Professional Tax Payment Online in Bangalore

If you want to pay professional tax in Bangalore, here is a stepwise guide for you.

  1. Visit the official website of the Commercial Taxes Department Bangalore and select ‘e-Payment’.
  2. Once redirected, click on ‘Next’. After that, from the available options, click on Bangalore Professional Tax.
  3. Now select the ‘Dealer Type’ and fill out the necessary information.
  4. Select the 'Next' option to verify all your provided details.
  5. Click on the 'submit' option and note down the auto-generated number for future reference.
  6. Click on the ‘Click here for payment' option. Follow the instructions on the screen and click the 'submit' option to complete the payment. Finally, payment details will appear on the screen.
Bangalore Professional Tax Payment Due Date
The due date varies from state to state. In Bangalore, every individual liable to pay professional tax must pay it every month before the 20th. 

Bangalore Professional Tax Late Payment Penalty

The Bangalore government levies a penalty for late payment of professional tax. A 1.25% penalty is imposed in such cases. The maximum penalty applicable is 50% of the total outstanding amount.

Bangalore Professional Tax Exemption

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

  1. Self-employed individuals who have not served as an employee for more than 120 days in a financial year.
  2. Salaried individuals with a monthly gross income of less than Rs 15,000 per month.
  3. Senior citizens above 60 years are eligible for professional tax exemption.
  4. Blind, deaf and dumb individuals or people diagnosed with nearly 40% of permanent disabilities.
  5. Members of the Armed forces, such as the Army, Air Force and Navy.
  6. Foreign technicians employed in the Karnataka state.

Compliance with the Professional Tax Act is indispensable for professionals and businesses operating in Bangalore to avoid legal complications and ensure smooth business operations. By understanding the provisions of the Act, adhering to registration and payment requirements, and maintaining meticulous records, individuals and organizations can fulfill their tax obligations effectively. Moreover, fostering a culture of compliance and accountability is vital to uphold the integrity of the tax system and promote economic development in the region.


Created & Posted by (Jai Sharma)
Accountant at TAXAJ

TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you a One Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are: Launch Your Start-Up Company/BusinessTrademark & Brand RegistrationDigital MarketingE-Stamp Paper OnlineClosure of BusinessLegal ServicesPayroll Services, etc. For any further queries related to this or anything else visit TAXAJ

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