Professional Tax for New Firms, Directors and partners.

This query is : Resolved

ARCHANA (Querist)
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22 April 2023 Sir/Mam,

New Firms opened FY 2022-23 one LLP and Other company Turnover is NIL

I had doubt to pay Professional Tax or not, if applicable how much we have to pay.

If Directors and partners Professional tax applicable or not, If applicable how much we have to pay.

Please clarify my doubts.

Thanking you,

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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10 July 2024 Based on the information provided for your new firms (one LLP and one company with NIL turnover), here's how Professional Tax (PT) would generally apply:

### For the Firms (LLP and Company with NIL Turnover):

1. **Professional Tax Applicability**:
- In most states in India, Professional Tax is applicable based on the number of employees and their salaries rather than on turnover. Since your firms have NIL turnover, they may still be liable to pay PT if they have employees.

2. **PT Registration**:
- Both LLPs and companies are typically required to register for PT if they have employees. Registration is usually mandatory within a specified timeframe from the date of employing the first employee.

3. **PT Payment Amount**:
- The amount of PT payable depends on the state where your firms are registered. Each state has its own PT slab rates based on the salary or wages paid to employees. For firms with NIL turnover, the PT amount would depend on the salaries of the employees, if any.

4. **Filing and Payment**:
- You would need to register for PT with the appropriate state PT department and file returns as per the schedule prescribed by the state. Even if there are no employees yet, the registration process may still be required.

### For Directors and Partners:

1. **Professional Tax Applicability**:
- Directors and partners are also typically liable to pay PT if they receive a salary or remuneration from the firm. The applicability depends on the rules of the state where the firm is registered.

2. **PT Payment Amount**:
- The PT amount for directors and partners is based on their income from the firm. Different states have different slab rates or fixed amounts applicable to directors and partners.

3. **Calculation of PT**:
- PT for directors and partners is often a fixed amount per month or per annum, depending on their income bracket. This amount varies from state to state.

### Steps to Clarify and Pay Professional Tax:

1. **State-Specific Rules**:
- Identify the state(s) where your firms are registered and where directors/partners reside, as PT rules vary by state.

2. **PT Registration**:
- Register for PT with the respective state PT department if you have employees or if directors/partners receive remuneration.

3. **Determine PT Amount**:
- Calculate the PT payable based on the applicable rates and the salaries/remuneration received by directors/partners.

4. **File Returns**:
- File PT returns regularly as per the schedule set by the state PT department, even if the PT amount is nil or zero.

5. **Consultation**:
- Consider consulting with a tax professional or contacting the state PT department directly for specific guidance tailored to your firms' situation and the directors' roles.

By following these steps and ensuring compliance with PT regulations in your state, you can clarify and address any doubts regarding Professional Tax for your new firms and directors/partners.