Background
The Punjab State Development Tax Act, 2018 was enacted to levy and collect development tax, commonly known as professional tax, from employers and individuals engaged in professions, trades, callings, or employments within Punjab. The Act ensures that every person or entity liable to pay professional tax is registered, enrolled, and compliant with reporting, payment, and record-keeping requirements. It empowers the State to regulate and streamline tax collection while maintaining transparency through mandatory documentation such as certificates, registers, and returns.
Applicability
Compliance requirement in the Act in accordance with the Rules
Certificate of Enrolment under Professional Tax as applicable on the Employers in the State of Operations. Every person liable to pay tax under the Act, except those earning a salary or wages for whom the tax is paid by their employer, must obtain a certificate of enrolment from the designated officer in Form PSDT-2. The application must be made within thirty days from the date of commencement of profession, trade, calling, or employment, or within such period from the date of becoming liable to pay tax as may be prescribed.
Certificate of Registration under Professional Tax as applicable on the Employers in the State of Operations. Every employer or person required to obtain a certificate of registration must apply in Form PSDT-1 within thirty days from commencement of profession, trade, calling, or employment, or within such prescribed period from the date of becoming liable to pay tax. The designated officer, after making inquiry, shall grant a certificate of registration in Form PSDT-3 within thirty days of receiving the application if it is in order.
If an employer or a person holding a certificate of registration or enrolment wishes to amend it, they must submit an application to the designated officer specifying the desired amendments and reasons, along with the certificate. If the officer is satisfied with the justification, the certificate shall be amended accordingly.
The employer or person holding a certificate of registration or enrolment shall display conspicuously at his place of work the certificate of registration or enrolment, as the case may be, or a copy thereof.
In the event of cessation of liability to pay tax because of closure of business or for any other reason, the employer or person holding the certificate of registration or enrolment shall send an intimation in writing to the designated officer within thirty days of such cessation.
If a holder of a registration or enrolment certificate relocates their place of work to another area, they must notify the designated officer who issued the certificate within fifteen days of the shift. A copy of this notice must also be sent to the designated officer of the new jurisdiction.
Every employer registered under the Act must submit an annual return in Form PSDT-6 for the financial year on or before August 31 of the following financial year. The return must be accompanied by receipted challans as proof of tax payment.
Every enrolled person must submit an annual return in Form PSDT-7 to the designated officer, along with a copy of the challan as proof, on or before August 31 of the following financial year. If an enrolled person earns income from a profession, trade, or calling (excluding agriculture) in multiple jurisdictions, the return must be filed with the designated officer having jurisdiction over their principal place of work.
Every employer responsible for deducting and paying tax must maintain a register recording the salary and wages paid to each employee and the amount deducted as tax from their earnings.
Every employer and every person shall deposit the amount of tax, penalty, or any other amount due into the treasury. Every payment shall be made by challan in Form PSDT-8 under the head “028-Other Taxes on Income and Expenditure B-Taxes on Professions, Trade, Callings and Employments.” The challan shall be in quadruplicate. The tax due for the month shall be deposited by the last day of the following month.
Every practising professional or person shall deposit the amount of tax, penalty, or any other amount due into the treasury. Every payment shall be made by challan in Form PSDT-8 under the head “028-Other Taxes on Income and Expenditure B-Taxes on Professions, Trade, Callings and Employments.” The challan shall be in quadruplicate. The tax due for the month shall be deposited by the last day of the following month.
Penalties & Punishments
Conclusion
The Act makes registration/enrolment, timely payment of tax, annual return filing, and proper record maintenance mandatory for compliance. Employers and professionals must adhere to prescribed deadlines (monthly for payments and annually for returns) to avoid penalties. Overall, the Act creates a structured compliance framework to ensure accountability and smooth collection of professional tax in Punjab.