Professional Tax Registration in Mizoram

The Professional Tax (PT) is a state-enforced tax on professional and salaried persons, working in any profession, trade, or employment. Just like all of India's other states, Mizoram has its own professional tax rules.

The Mizoram state government is responsible for levying and collecting this tax under the Mizoram Professions, Trades, Callings, and Employments Taxation Act. For any person or entity doing business in Mizoram, professional tax registration is compulsory.

In this article, we will learn about the registration procedure for a professional tax in Mizoram, including its benefits, documents required while registering, and some common questions that may arise.

Overview

Mizoram imposes a professional tax on individuals who earn their income through various professions, trades, and employment. This comprises salaried employees, freelancers, and self-employed professionals across a wide variety of professions, such as lawyers, doctors, chartered accountants, engineers, etc. The employer subsequently deducts the tax from salaried employees' salaries and deposits it with the state government.

For those who are self-employed, they have to register themselves with the tax department and then pay their own income tax as per the slabs set by the income tax department.

A professional tax is a slab rate that is limited to ₹2,500 per annum, according to India's constitution. All Mizoram companies, firms, and self-employed persons are required to apply for professional tax within thirty days after employed or starting a company. If not paid back, penalties and interest on the unpaid balance may apply.

Benefits of Hiring Professional Tax Registration Mizoram

There are quite a few advantages to registering for professional tax in Mizoram, not only for employers but also individuals. Here's a summary of the advantages it provides:

• Compliance with legal requirements: This professional tax department ensures that business units and individuals fulfill their statutory obligations under the Mizoram State Government's Act. Failure to comply can result in fines and other legal repercussions that will take the business away from its core operations.
• Prevents legal liability: As an entrepreneur, it is mandatory to file your professional tax on time, or you will suffer a heavy penalty along with interest. Paying and filing on time is a beneficial way of not getting into problems with the law, which in turn can lead to damaging your business reputation.
• Income Tax Deduction: According to Section 16(iii) of the Income Tax Act, salaried employees and self-employed individuals can claim professional tax as a deduction. This can help to reduce taxable income and, subsequently, tax burden.

Procedure for Professional Tax Registration in Mizoram

Process for Professional Tax Registration in Mizoram Both employers and self-employed individuals are required to properly register and make payments. This is the state portal over which most of the process is online.

1. Step 1: Visit the Official Website - To begin the registration process, visit the official portal of the Mizoram tax department. Navigate to the professional tax section, where you'll find registration forms and guidelines.
2. Step 2: Fill out the application form. - The employer or self-employed person must complete the online registration application form. The form contains the nature of the business, income, employment status, and other information on which the loan will be highly relevant.
3. Step 3: Upload Necessary Documents - In addition to the application form, applicants must also file certain documents that support their identity and business. The next section provides a detailed explanation of the required documents.
4. Step 4: Submission and Verification - Complete the application form and send it with all related documentation. The tax authorities in Mizoram have to verify the application. If the form is in order, the registration will take place.
5. Step 5: Certificate issuance - The applicant will receive a Professional Tax Registration Certificate after verification. The employer can use this certificate to deduct and pay taxes for both employees and self-employed individuals.
6. Step 6: On-Time Payment and Return Filing - Once you have registered, then thereafter, depending on the income slab and business type, you have to pay professional tax either monthly, quarterly, or annually. We must also file the returns on time, provided we comply with the rules.

Professional Tax Slabs in Mizoram

The table below shows the amount of professional tax one must pay based on their monthly income:

Professional tax registration requires the following documents:

The following documents are compulsory to obtain a professional tax registration in Mizoram. To successfully complete the professional tax registration, certain documents must accompany the application. In concrete terms, these are documents that confirm your identity and activities in business, as well as income. List of documents as follows:

For Employers:

• The PAN card represents the business or company.
• Certificate of Incorporation (for companies)
• Provide evidence of the business's location, such as an electricity bill or a rent agreement.
• We provide details about employees, including their salary structure and the number of employees.
• Obtaining the registration certificate under other applicable laws, such as the Shops and Establishment Act, is necessary.
• The business's bank account details.

For self-employed individuals:

• The individual's PAN card
• Please provide proof of residence and office (Aadhar Card, voter ID, etc.).
• Income proof can be in the form of profit and loss statements, bank statements, or audited financials.
• The applicant must provide a recent passport-sized photograph.
• Provide proof of your professional status, such as a degree certificate for doctors or lawyers, or documented evidence.

When applying, one should have both soft copies and physical copies of these documents on hand to avoid any headaches during registration.

FAQs about Professional Tax Registration in Mizoram

Q1. In Mizoram, who is responsible for paying professional tax?

Every individual involved in any profession, trade, calling, or employment is required to pay a professional tax on their income. These include salaried people, freelancers, and professionals like doctors, lawyers, and chartered accountants.

Q2. In Mizoram, what is the maximum amount of professional tax payable?

Mizoram's professional tax is capped at ₹ 2,500/- annually. This is usually a specific amount exclusive to an income-level individual or employee.

Q3. Is professional tax mandatory for self-employed individuals?

Yes, even self-employed professionals, such as lawyers, doctors, and other trades, must register and pay professional tax in the same manner as salaried employees.

Q4. If I don't register for professional tax in Mizoram, what happens?

You may have to bear such a heavy penalty, interest, and prosecution even if you fail to register or pay professional tax in Mizoram.