Understanding Professional Tax in Odisha: A Comprehensive Guide

Recent Update:
Numerous businesses registered under GST in Odisha are receiving show cause notices from the Department in Form XV due to non-payment or non-registration under the professional tax. To gain comprehensive knowledge about the applicable professional tax, please refer to the article provided below.

Professional tax is a form of direct taxation imposed by state governments throughout India. As a state-specific tax, the rules pertaining to its collection, payment, and registration vary across different states due to the presence of distinct Professional Tax Laws. This tax applies to a wide range of individuals, including business owners, working professionals, merchants, and individuals engaged in various occupations.

Professional Tax In Odisha is governed through The Odisha State Tax on Professions, Trades, Callings, and Employment Act of 2000 is a significant piece of legislation Implemented with the objective of taxing individuals involved in a wide range of professions, trades, callings, and employment. According to this act, every employer operating in Odisha must register themselves as a Professional Tax Deductor, ensuring their adherence to the provisions outlined in the law. Moreover, self-employed professionals who meet the criteria for professional tax liability are also obligated to complete the registration process, aligning themselves with the legal requirements.

Who is Liable to Register under Professional Tax?

Professional tax in Odisha extends its applicability beyond just employed and self-employed individuals. It encompasses a broader range of entities such as companies, firms, LLPs, corporations, HUFs, clubs, and more. To gain a better understanding of professional tax applicability in Odisha, consider the following points:

1. GST-registered entities in Odisha must register themselves under the Professional Tax Act and pay it accordingly.
2. Businesses operating in Odisha are responsible for deducting professional tax from their employees’ salaries on a monthly basis, according to the applicable rates. Subsequently, they are required to deposit the deducted amount to the designated state government’s Head of Account through the state treasury.
3. Other professionals, including medical consultants, radiologists, pathologists, and individuals engaged in similar occupations, are obligated to enroll under the Professional Tax Act. They must fulfil their annual tax payment obligations as per the applicable rates and provisions outlined in the act.

It is important for the entities and professionals falling under the purview of professional tax in Odisha to adhere to the registration and payment requirements to ensure compliance with the relevant regulations.

How to Register for Professional Tax In Odisha?

To fulfil Professional tax obligations, taxpayers are required to enrol and Obtain a Registration certificate under the Act. This registration process typically involves submitting relevant documents and details pertaining to the taxpayer’s profession or business. Eligible Assesse can follow the following steps for Enrolment:

1. Visit https://web.odishatax.gov.in/portal/eRegistration/FirstTimeRegistration.aspx
2. Fill in your Mail ID & other Details along with a security answer
3. Once done proceed with the submission
4. Once submitted you should receive a mail to activate the account, proceed with the given link in mail
5. Fill in other additional information, once all information is entered proceed with submission of the application in Form ii
6. Once Submitted you should get an Acknowledgement number and your application should be approved in a few days.

How to pay Professional Tax in Odisha ?

1. Visit https://www.odishatreasury.gov.in/echallan/challan-details
2. Select 0028-00-107-0166-01045-000 – PROFESSIONAL TAX as Challan purpose
3. Fill in your Registration Details, if you are a GST Registered entity fill in your GST Number
4. In Payment Type Select Admitted and Deposit Type as required in case of voluntary payment and proceed selecting the period for payment.
5. Once all details are you can proceed with payment.
6. Once payment is successful you should receive a payment challan which you need to save for any future reference.

Due Date for Payment of Professional Tax In Odisha:

The professional tax must be paid on or before the 30th of June each year.

Consequences of Non-Compliance:

Failure to remit professional tax (PT) within the specified due dates can result in additional financial consequences. In such cases, interest is levied at a rate of 2 per cent per annum, calculated on a simple interest basis, for any month or part thereof that remains unpaid. Furthermore, non-payment of the tax may attract a penalty ranging from a minimum of 25 per cent to a maximum of 50 per cent of the tax amount due, in addition to the interest charges. It is crucial to comply with the prescribed timelines to avoid incurring these penalties and interest charges.

Professional Tax Slab for Odisha

For GST Registered Entities, the Professional tax annually is capped at INR 2,500/-

For Salaried Individuals

Monthly Salary	Professional Tax To Be Deposited Monthly
Upto INR 5000	Nil
INR 5000 to INR 6000	INR 30 Per Month
INR 6000 to INR 8000	INR 50 Per Month
INR 8000 to INR 10000	INR 75 Per Month
INR 10000 to INR 15000	INR 100 Per Month
INR 15000 to INR 20000	INR 150 Per Month
Above INR 20000	INR 200 Per Month

For businesses and service providers not falling within any other specified category

Gross Turnover in the Previous year is
Upto INR 100000	Nil
INR 100001 to INR 200000	INR 500 Annually
INR 200001 to INR 500000	INR 1000 Annually
INR 500001 to INR 1500000	INR 1500 Annually
Above INR 1500000	INR 2500 Annually

Professional Tax Slab for Specified Businesses in Odisha

For legal professionals, such as solicitors and notaries public:

Practising in a Municipal Area since
5 Years	Nil
5 to 10 Years	INR 250 Annually
10 to 20 Years	INR 500 Annually
Above 20 years	INR 1000 Annually
Practising in an area other than a Municipal Area since
10 Years	Nil
10 to 20 Years	INR 250 Annually
Above 20 years	INR 500 Annually

For individuals registered or licensed under the Insurance Act, 1938, including Chief Agents, Principal Agents, Special Agents, Insurance Agents, and Surveyors or Loss Assessors:

Gross Turnover in the Previous year is
Upto INR 15000	Nil
INR 15000 to INR 18000	INR 200 Annually
INR 18000 to INR 24000	INR 250 Annually
INR 24000 to INR 36000	INR 350 Annually
INR 36000 to INR 60000	INR 400 Annually
INR 60000 to INR 96000	INR 450 Annually
Above INR 96000	INR 500 Annually

For technical and professional consultants, tax consultants, chartered accountants, and cost accountants

Practising For a period of
Upto 5 years	INR 1000 Annually
5 to 10 Years	INR 1500 Annually
Above 10 years	INR 2500 Annually

For owners and lease operators of the following businesses:

Beauty Parlours (Non Air Conditioned)	INR 1000 Annually
Beauty Parlours (Air Conditioned)	INR 2500 Annually
Hair Styling Saloons (Air Conditioned)	INR 2500 Annually
Health Resorts & Slimming Centres	INR 2500 Annually
Air Conditioned Restaurants	INR 2500 Annually

For contractors, regardless of their description, engaged in any type of work

Gross Turnover in the Previous year is
Upto INR 100000	Nil
INR 100000 to INR 500000	INR 1000 Annually
INR 500000 to INR 1000000	INR 1500 Annually
Above INR 1000000	INR 2500 Annually

For real estate agents, promoters, brokers, commission agents, delcredere agents, or mercantile agents, an annual fee of INR 1000 applies.

For stevedores, clearing agents, customs agents, licensed shipping brokers, or boat suppliers, an annual fee of INR 2500 applies.

Even though Professional tax is pretty simple compliance its generally overlooked and in time could attract cumulative payments along with penalties. So Businesses and applicable persons are advised to comply with Professional tax law to avoid any surprise notices. Free to book our consultancy for any assistance in registration and payment of Professional tax in Odisha.