The Karnataka Tax on Profession, Trades, Callings, and Employments (Amendment) Act, 2023, was recently notified by the Karnataka Government on March 14, 2023. The Act has been revised to improve its interpretation and implementation. The amendments to the 1976 Act include the addition of new clauses such as “agent” and “assessment” for better understanding.
One of the significant amendments is reducing the interest rate from 2% to 1.5% for a person making a deduction who defaults in payment. Another amendment is reducing the penalty for non-payment of tax under Section 12 of the 1976 act from 50% to a fixed amount of ten percent, regardless of whether or not a reasonable cause exists.
The Act also states that a person is liable to pay tax if they fall under more than one entry in the Schedule. The basis for calculating tax liability has been modified. The more significant number of workers or employees at any time during the year shall be counted under Serial No. 4 in the Schedule.
The lessee of any asset or business under a lease shall be deemed to be the person liable under the Act for this Schedule. If a firm is obligated to pay, and its partners pay their share, then the partners are exempt from liability under this Act.
The amended explanation shall not apply to additional places of business exclusively used as godowns for storing goods, etc. Each place of a person listed in any item of the Schedule shall be treated as a separate person for the levy of the Profession tax specified in the Schedule.
In summary, the Karnataka Tax on Profession, Trades, Callings, and Employments (Amendment) Act, 2023, is an amendment to the 1976 Act with new clauses added for better interpretation. The amendments aim to improve the implementation and reduce penalties for non-payment of taxes. The Act also clarifies the tax liability of lessees, firms’ partners, and multiple entries in the Schedule.