What is Provident fund?
Another name for the pension fund is Provident Fund. It seeks to offer lump-sum compensation to workers on dismissal from their workplaces. This is separate from pension funds for both lump sum and monthly pension contributions.
Workers pay the provident fund a part of their wages and employers are expected to donate on their workers’ behalf. The funds in the Fund are now held and administered by the government and eventually retired by pensioners or their surviving families in certain countries.
PF Tax benefits :
Tax-free is the contribution of the business or employer to the EPF account. You can earn an allowance of up to Rs 1.5 lakh under Section 80C of the IT Act for your contributions.
However, if you are not enrolled in compliance with the EPF system, you can opt-out at the outset. By completing Form 11, you must inform the organization of this. You cannot opt-out if you have registered already with a valid EPF account.
You could not uninstall the account for potential benefits. It could increase your profits, but in other ways, you must build up your potential cash reserve.
What is professional tax?
Tax on employed persons working in government or non-governmental bodies or, in practice, any occupations such as attorneys, lawyers, physicians, etc. or people carrying out a form of business/profession shall be the tax imposed by the various State Governments of India.
At the State level in India, skilled tax is levied. Various states have various collection rates and processes. In not all countries it is enforced. The countries charged are Andhra Pradesh, Assam, Chhattisgarh, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Meghalaya, Odisha, Sikkim, Tamil Nadu, Telangana, Tripura, and West Bengal.
Implications of professional tax regulation's violations
Although the exact amount of the penalty or penal interest depends on the law of each state, all of these states levy a penalty for failing to file until skilled tax legislation is in effect. There are also fines for failure to deposit by the due date as well as failing to file a return by the due date. Consider the following scenario: In Maharashtra, a penalty of Rs 5 per day is levied for the late entry, the interest of 1.25% per month for late payment, a penalty of 10% of the value of tax in case of late/non-payment of technical tax, and a penalty of Rs 1000 – Rs 2000 for late filing of the return.
Who does this tax collect?
A certain amount of employers receive technical tax from their workers’ monthly wages. The employer then owes this part to the administration. If you may not do that, they will be disciplined when the technical tax is not collected or not charged. You will have to pay the skilled tax yourself if you do so for others.
One will pay tax by applying for it using a form if you are a professional and do not work for an employer. Once the document is submitted, the person will be presented with a registration number. Under these identification numbers at the accounts, payment of the professional tax can be made. It should be remembered that the government offers tax discounts in certain countries if charged collectively for a couple of years in a lump sum. That is why it is worth researching the laws of your state’s technical tax.
