Monetary Penalty for Misrepresentation

• Submitting false declarations under PT laws—such as incorrect salary details, fake exemption claims, or false employee classifications—can attract monetary fines.
  
• Most state professional tax rules prescribe a penalty ranging from ₹500 to ₹5,000, depending on the severity and intent of misrepresentation.
  
• The amount may increase if the false declaration leads to tax evasion or underpayment over multiple periods.
  

Interest on Underpaid Tax

• In addition to penalties, authorities impose interest on any underpaid PT arising from a false declaration.
  
• Interest is typically charged at 1% to 2% per month from the due date till the date of actual payment.
  
• This applies even if the underpayment was unintentional but caused by incorrect data submission.
  

Disqualification from Exemptions and Refunds

• Entities found guilty of submitting false information may be disqualified from claiming future exemptions, such as for disabled employees or self-employed professionals.
  
• Any refunds or adjustments claimed through false declarations are reversed, and recovery proceedings are initiated.
  
• Authorities may also block access to online filing systems until the rectification and penalty payments are completed.
  

Legal Proceedings for Willful Fraud

• If the false declaration is proven to be willful or fraudulent, the PT department may initiate legal action under the applicable state’s tax laws.
  
• This can include prosecution, recovery proceedings, and blacklisting of the business or employer.
  
• Repeated or large-scale violations may attract inspection audits or regulatory scrutiny.
  

Obligation to Rectify and Disclose Errors

• Employers or professionals who discover an error after submission are encouraged to:
  
  • Voluntarily file rectification via the PT portal.
    
  • Pay the differential tax and interest, if any.
    
  • Submit a written clarification to the tax officer, if needed.
    
• Voluntary correction may reduce or eliminate penalties in some states.