Karnataka Form 5 for Annual Profession Tax Return

Karnataka Form 5 for Annual Profession Tax Return

If you are an employer registered under the Annual Profession Tax Act, you must file the returns declaring every month salaries paid by you to your employees. Managing business expenses and taxes together is a tough job and employers in Karnataka are aware of this; however, if you wonder how to go about it, where to find the forms, and how to file them, this article is for you.

We shall be answering all your queries regarding the Profession Tax Form 5 through this article. Here is what we shall cover:

Overview of Karnataka Tax on Professions, Trades, and Employment Rules of 1976?

Every month, all employers registered under the Profession Tax Act must submit a Form 5-A Statement with details of the pay and wages provided to their employees. Along with this, they must also include the amount of tax deducted. This Statement must be provided on or before the 20th day of the following month, coupled with the total amount of tax due based on the Statement.

The said employer must additionally file an annual return in Profession Tax Form 5 within 60 days of the year's end. In addition, he must pay the whole amount of tax due based on the return; They can subtract any tax already paid in Form 5-A.

If the amount of the monthly deducted tax is less than Rs. 5,000, the employer must submit Form 5-A and tax payment within 20 days of the quarter's end.

Important Definitions within the Rules

The section explains the terms and their definitions as used in the context of the profession tax.

Quarter refers to a duration of three months that concludes on either of these days:

Wages or Salaries mean the pay received by the employers. The pay includes receiving arrears, dearness allowance, bonuses, and any profits shared by the company.

Profession tax is the tax that is levied on the employers under the provisions of the Profession Tax Act.

Levy and Tax charge is the tax collected from the professions, trades, and employment for the benefit of the State.

What is the Karnataka Form 5 for Annual Profession Tax Return?

This section will help us to understand the diverse aspects concerning the annual professional tax return. Let’s walk through them one by one.

Registration and Enrolment

The first step is to register under the Profession Tax Act. Every employer except the government officers who pay tax under section 4 must obtain a registration form from the authorities for enrollment. This also applies to every individual who is liable to pay tax under section 4.

Every employer or individual must obtain this certificate of registration within ninety days from the date the Act commenced.

If any employer or individual were not involved with any profession or trade, then they must obtain the registration certificate within thirty days from the commencement of their respective trade or profession.

Any person who is referred to in subsection (2) must obtain the certificate of registration within thirty days of becoming eligible to pay tax.

Once the application is made, the concerned official will review it and grant them the certificate within thirty days after the receipt of the application.

In the case where the reviewing authority finds that the applicant has deliberately provided incorrect or false information while applying, the officer may impose a penalty of not more than Rs.1000. Yet, the applicant will be given a considerable opportunity to speak and defend their side.

Returns

All the employers enrolled under the Act must furnish returns in the prescribed format to the concerned official within sixty days of the expiry of the year. The returns must include all the wages paid by them and the corresponding tax amount deducted in the previous year.

Before submitting the returns under subsection (1), the employers must pay the full amount of tax in advance on the basis of a reduced return that has been lowered due to a previously paid tax under section 6A. Along with the return, the employer must also submit credible proof of the payment of such tax. The tax must be assumed to have been paid once the final assessment is made.

Payment of Tax in Advance

A Statement comprising the details of the salaried paid by them must be submitted by the employers to the authorities within the twenty days of the expiry of a month. This should be done in the prescribed format along with the tax deducted by them during the month exactly prior to this month.

However, this requires that the tax amount deducted has not exceeded Rs. 5000, and the registered employer must provide the Statement within twenty days of the expiry of the quarter. All these Statements must be coupled with a treasury challan in the proof of payment.

In case the employer fails to submit the Statement or provides incorrect or incomplete details, the assessing authority may order another assessment provisionally for that particular month.

Based on the assessment, the authority may demand to gather the tax amount.

Payment of tax by enrolled individuals

The employers registered under the Act must ensure that the tax is paid in the prescribed manner in the stipulated time. The amount must be paid by the tax-payer in the following format:

When a person is enrolled before the start of the year

Before April 30 of that year

When a person is enrolled after the start of the year

Within one month since enrolment

Consequences of failing to deduct or to pay tax

The guidelines suggest that if an employer does not deduct the tax while paying the salaries or fails to pay tax after the deductions, they may have to face the consequences.

Penalty for non-payment of tax

Like any other government procedure, failure or delay in paying the Karnataka profession tax can attract penalties. If such a thing happens without the employer being able to provide a good reason, the concerned authority may impose a fine or a penalty of up to 50% of the amount of the due tax. The penalty amount would be in addition to the amount payable as interest mentioned under subsection (2), (3) of section 11.

Recovery of tax

Any kind of amounts pertaining to taxes, penalties, or interest under the Act must be collected from the enrolled employer or individual in the following format:

Authorities overseeing the Implementation of the Act

The State government appoints certain officers who oversee and estimate if the Act has been implemented correctly. The officers that may be appointed are as follows:

It must be noted that all the officers will be supervised and controlled by the State government and the commissioner.

Exemptions

Let’s look at the exemptions under the Act:

Procedure to File Karnataka Form 5 for Annual Profession Tax Return

The registered employer now has the option of submitting the monthly Statement in Form 5 –A and the yearly return in Profession Tax Form 5 electronically. Such an employer may also pay the tax electronically via the internet. Here are the detailed steps you can follow to file the profession tax return:

Option to Pay Electronically: E-payment Procedure

In this case, https://vat.kar.nic.in/epay is the website for the e-Payment system. This is an open website that does not require user authentication. This website can be accessed via a link on the CTD's website (http://vat.kar.nic.in). The procedure for making an e-payment is as follows.

Karnataka Profession Tax Form 5 E-payment process Karnataka Profession Tax Form 5 E-payment process

Making Payments

If you choose to make the payment through cheque or DD, or a challan, follow the steps mentioned here:

Format of Form 5 for Karnataka Profession Tax Return

The image depicts the format of Form 5 for the profession tax return. Here is the information that goes into the form:

Format of Form 5 for Karnataka Profession Tax Return

Next, we have the table which has fields which are as follows:

Below the table, you would also need to input the following information: