Financial Management: “Professional Tax” For Dentists

Financial Management Professional Tax For Dentists

I have come across many incidences where professionals had to pay additional interest to the government as they failed to pay their professional tax and this happens because most of them were unaware of Professional Tax. Some also have misconception that taxes are to be paid only when their income comes in the tax bracket & they approach CA only when their income becomes taxable under Income tax. This blog is an attempt to expound the concept of professional tax and help you save on penalties.  

Visit the DentistFriend dental portal to write blogs and participate in discussion forums.

What is Professional Tax Or PT?

PT is a tax charged on the income earned by way of profession or employment. This is additional to income tax and has to be paid to State Government. Professionals like doctors, lawyers, chartered accountants, artists etc comes under the purview of this tax. This is a slab-based tax and the rates vary state to state however the maximum amount that can be charged as PT by any state is Rs. 2500 annually. 

Registration for Professional Tax 

It is advisable to register your practice for PT immediately after commencement of dental practice. Before registering yourself for PT, you need to understand two main things one is PTRC and the other is PTEC. 

Professional Tax Registration Certificate (PTRC) is to be obtained by the professional in the capacity of employer. For instance, if you have 10 employees working with you in your business having monthly salary more than 7500, then you need to deduct PT on their salaries every month as per the rate given (Rs.200 per month & Rs.300 for February month).

Professional Tax Enrollment Certificate (PTEC) is to be obtained by the professional for its own existence and engaging in profession (business) within the state of Maharashtra.

PTR will have to be paid according to the salary paid to employees whereas PTE is fixed at Rs.2500 annually.

How to register? 

Step 1: Log on to www.mahavat.gov.in and open ‘e-PT Registration’ in e-services and fill in details like Name of the applicant, PAN, TAN, Status of Applicant and Location. Select Act as ‘PTRC/PTEC Registration’ (any one which you have to register for), the e-application for registration in ‘Form I’ will open for PTRC and ‘Form II’ for PTEC. Fill in the complete details and ‘Submit’.

Step 2: Once the application is submitted; an acknowledgement is generated containing date and time for attending before registration authority along with designation and address of registration authority. This acknowledgement has to be printed and signed by the applicant and produced before the PT registration authority at the time of verification on given date and time along with relevant documents. Once it is approved by the authority, TIN (Registration Certificate Number under the profession Tax Act) is generated. 

Step 3: After obtaining Registration Certificate the certificate holders are now needed to enroll themselves for the e-services on the same website, this will enable them to file e-return and e-payment of professional tax. 

The due date for paying PT is before 30th June of every financial year.

Consequences of late payment or non-payment of PT:

For late payment of PT, interest @1.25%-2% pm is levied and the state may also impose a penalty of 10% of the total amount due.  

Please Click Here for the due Dates for profession tax payment

Source : DentistFriend

Will GST Put Dentistry In A Big Loss Or We Can Outperform Against GST?

Will GST Put Dentistry In A Big Loss Or We Can Outperform Against GST

I am Dr. Nilesh Bhimani (B.D.S.), a senior Dental Surgeon from Surat (Guj.) & I would like to throw some lights on effect of GST on Dentistry! Goods and service tax (GST) is one of the most revolutionary step in history of Indian Tax System and future will witness it’s real effect. Healthcare services are exempt from GST according to GST Act, 2016. So we don’t need to charge GST on out treatment charges as we are not selling products, we provide only healthcare services.

From our dental portal you can do dental courses all over India, write blogs and participate in discussion forums.

There is a lot of buzz about GST; I see many people are talking and discussing whether GST is good or bad on the contrary I know many dentists who neither care for the GST effects nor even willing to know how it is actually going to affect the future of private dental practice. I am writing this blog for all those dentists who are curious & wish to know the after effects of GST with the hope that you will take it positively.

Let’s understand how GST is going to affect future and success of your private dental practice. Here are few points which I noticed and would want you to pay attention.

A. All standard Laboratories have transform tax statement from 5% VAT to 12% GST, means 7% rise on lab bills.

B. All material companies have changed taxation from 5-12% to 12-18% or up to 28% in few cases, means 7-16% rise in billing. 

It’s a big amount really..!

C. My clinic electricity, telephone , SMC tax, stationary, maintenance, printing, magazines or other monthly based expenses rise from 5% VAT to 12% GST, means 7% rise.

D. My clinic Insurance, Membership fees, Conferences fees etc will be also raising to some extent.

E. My staff salaries, doctor’s salaries etc will have to be raised in coming months as they have to compensate for their increased expenses due to implementation of GST.

F. Most important is my personal expenses.

Now onwards my life insurance policies, general insurance policies, lifestyle expenses, food bills, school fees, Tuition fees, shopping , holidays (which is maximum like 28% on luxury holidays)everything I do on my day to day expenses will rise like anything. Friends, We say everyone that we don’t need to add GST on patients treatment bills because we are exempted.

But are we really exempted on GST even after paying all above expenses?

There is only one solution for all above and that’s none other than RAISE YOUR TREATMENT CHARGES!

From 1 July onwards minimum 10% rise on your treatment charges would only compensate for the GST which you will pay now onwards & don’t think that you have raised charges, instead you have compensated your loss only.! In addition, 6-8% is your inflation rate which means every year your cost of same expenses increases at this rate over a period of one year. So 6-8% hike in charges will again compensates loss of steady income year by year.

So Friends, 16-18% (10% GST effect + 6-8% Inflation) rise in your treatment charges will only make you stable in your income year by year. Those who can add more than 18% rise in charges are real brave dentist and I will be happy to add them in my friend list. In fact, this is the best chance to raise your chrages as a momentum. Agreed people will ask you that it is not in your branch but you can tell them that your lab bills, material expense, clinic expense everything rise by more than 10-15% and so you have no other option if you want to justify but most of the times people will automatically justify you without asking about it.

I have tried to give you some striking GST effects on your dental practice. Hope we all put a step ahead for a successful dental carrier! Try it today..! Keep Smiling

Source : DentistFriend