PROFESSIONAL TAX -PUNJAB STATE DEVELOPMENT

PROFESSIONAL TAX IN PUNJAB

PUNJAB STATE DEVELOPMENT TAX

ALL YOU NEED TO KNOW ABOUT

Know Who is liable to pay Punjab State Developmental tax, Exempt persons from Punjab State Developmental tax, Who will pay Punjab State Developmental tax, Registration under Punjab State Development Tax Act and Rules, 2018, Payment of Tax under Punjab State Development Tax Act and Rules, 2018, Challan Generation and Deposit, Filing of Returns under Punjab State Development Tax Act and Rules, 2018 and Assessment under Punjab State Development Tax Act and Rules, 2018.

Answers to following Questions

1. Who is liable to pay Punjab State Developmental tax?
2. Exempt persons from Punjab State Developmental tax
3. Who will pay Punjab State Developmental tax? (Section 5)
4. Registration under Punjab State Development Tax Act and Rules, 2018 (Section 6)
- a. Who is required to register?
- b. Who is not required to apply for register?
- c. When to take registration?
- d. Documents required for registration?
5. Payment of Tax under Punjab State Development Tax Act and Rules, 2018 (Section 10)
6. Challan Generation and Deposit
7. Filing of Returns under Punjab State Development Tax Act and Rules, 2018 (Professional Tax) (Section 7)
8. Assessment under Punjab State Development Tax Act and Rules, 2018 (Section 8, 9)

1. Who is liable to pay Punjab State Developmental tax?

Every employee or person doing business or profession in Punjab is liable to development tax if Taxable Income (Income after deduction of 80C etc) is above maximum exemption limit as per Income Tax Act i.e. Rs. 2,50,000/- at present. See below examples.

Income to be seen is of same year for which development tax is to be paid. i.e. to pay development tax of FY 2018-19, Income of same year i.e. FY 2018-19 is to be seen.

Section 4 also mention ‘Income tax payee’ which creates confusion as individual with Total Income above Rs. 3,00,000/- is income tax payee in Income Tax Act. Punjab State Govt should clarify the same. At present, we are assuming 2,50,000/- is cutoff amount to check applicability in below examples.

Date of Act: April 19, 2018

2. Exempt persons from Punjab State Developmental tax

1. Senior Citizens

2. Persons exclusively engaged in Agricultural activity

Every business operated in Punjab state is liable for the same. No exemption will be allowed just because Head office is in different state. Central Govt Offices, State Govt Offices, Defense, Railways all are also covered.

Illustrative Example:

Particulars	Mr. 1	Mrs. 2	Ms. 3	Mr. 4	Mr. 5	Mr. 6
Salary	4,02,000	–	1,05,000	–	2,95,000	–
House Property	-75,000	–	–	–		5,00,000
Business/ Profession	–	3,05,000	–	47,000	–	–
Capital Gain	–		2,00,000	–	–	1,00,000
Other Source	15,000	2,000	75,000	2,50,000	–	6,00,000
Gross Total Income	3,42,000	3,07,000	3,80,000	2,97,000	2,95,000	12,00,000
Deductions 80C to 80U	50,000	60,000	60,000	15,000	50,000	50,000
Total Income	2,92,000	2,47,000	3,20,000	2,82,000	2,45,000	11,50,000
Tax Payable?	Yes	No	Yes	Yes	No	No
Reason	Total income above 2.50 Lakh	Total income below 2.50 Lakh	TI above 2.50 Lakh even though Salary is less than 2.50 Lakh	TI above 2.50 Lakh even though Business Income is less than 2.50 Lakh	Total income below 2.50 Lakh	No Salary or Business Income

3. Who will pay Punjab State Developmental tax? (Section 5)

1. In case of employee, employer will deduct tax from salary @ Rs. 200 per month and make payment to Govt.

2. In case of person engaged in business or profession, he shall be liable to register u/s 6 and pay taxes of Rs. 2400/- annually.

Act has been notified on 19^th April, 2018, so tax amount of April, 2018 will be Rs. 80/- only (proportionate amount for 12 days)

Person includes Individual, Firm, company etc so all are required to pay tax as per Act but registration as tax payer is allowed by portal for individuals only.

Partners shall be liable to register themselves if applicable because they are not employees of firm.

Directors if withdrawing salary will not be required to register as company will deduct as employer.

If an employee is employed from more than one employer then he can choose one employer or register himself u/s 6 under this act and give declaration to other employers and designated officer in Form PSDT-5.

4. Registration under Punjab State Development Tax Act and Rules, 2018 (Section 6)

a. Who is required to register?

1. An Employer who is liable to pay salary to person(s) who are covered under Development Tax. Application is to be made in form PSDT-1 and registration will be granted in Form PSDT-3

2. Self-employed persons who are running any business and profession and they are liable for this tax. Application is to be made in form PSDT-2 and registration will be granted in Form PSDT-4

b. Who is not required to apply for register?

Employees are not liable to register because their employer is liable to register and deduct tax.

c. When to take registration?

Within 60 days from date of Act however Portal for registration is live in the month of October only. So registration should be taken now. Persons who become liable in future due to start of new business or profession or increase in income will have to take registration within 30 days from which they are liable.

Penalty for failure to register can be imposed at Rs. 50/- per day

d. Documents required for registration?

1. PAN

2. GSTIN

3. ADDRESS

4. Any addition address within Punjab

5. Email and Mobile No.

6. Authorized responsible person name, father name and designation

7. Total No of all Employees in Punjab (Average of last year can be given)

Manual for registration in case of Individual Tax payers click here

Manual for registration in case of Employers click here

Registered person shall display certificate at his place of work.

5. Payment of Tax under Punjab State Development Tax Act and Rules, 2018 (Section 10)

Employees’ tax can be deducted and paid monthly or quarterly. If the number of employee is different in each month, then monthly deposit is advised.

Due Date of Deposit by employer is not prescribed yet in Act/ Rules. Deposit can be done in a reasonable period at present.

Tax by others will be paid once in a year within 30 days from date of registration.

Late deduction, Late Payment will attract simple interest @2% for every month or part of month.

6. Challan Generation and Deposit

–> Go to Generate challan, Select month and enter No. of employees and submit.

–> Print 4 copies of challan generated in Form PSDT-8

–> At present online deposit not available.

–> Make Cheque in favor of Govt. Dues. Cash also allowed.

–> Deposit in Bank

–> Use Code 0028-00-107-01-00 for State Bank of India

–> After some days, bank will update and in Challan history, status will be show as paid.

–> After generation, you can also cancel the challan if required.

7. Filing of Returns under Punjab State Development Tax Act and Rules, 2018 (Professional Tax) (Section 7)

Return will be filed annually in Form PSDT-6 for employers on or before the 13^th April of next year.

Tax payers shall also file annual return in Form PSDT-7. Due date not prescribed yet.

Return shall be accompanied with all challans.

Employees whose tax is deducted by employer need not to file any return.

Penalty for failure to file returns can be imposed at Rs. 50/- per day

8. Assessment under Punjab State Development Tax Act and Rules, 2018 (Section 8, 9)

Filed returns will be accepted by designated officer else notice will be issued for assessment. Assessment can be done within 3 years (6 years in case of special circumstances as prescribed) from date of filing of return or due date whichever is later. Any additional demand shall have to be paid within 15 days.