PROFESSION TAX IN MAHARASHTRA

Profession tax was introduced in the year 1975 in Maharashtra. The intention was to raise the resources needed for implementing the Employment Guarantee Scheme and to provide for establishment of the Employment Guarantee fund. The salaries of persons and the businessman/ professionals have to pay profession tax in Maharashtra. The employment guarantee scheme of Maharashtra is now converted to centrally funded employment guarantee scheme via MGNREGS. With introduction GST on 1st July 2017, the indirect taxes of the country are subsumed under GST. Except Profession tax. Yes, Profession tax levy is persisting independently.

It is the owner’s/ company’s responsibility to deduct the profession tax from the salaries of the employees and deposit it to Government. Also, the business entities and professionals have to get their own profession tax number and deposit the profession tax to the Government every year. The rate of profession tax is prescribed in the profession tax act under various Schelle entries. The maximum amount of profession tax to be payable by an entity/person shall not exceed Rs 2500/-.

Who Is Required To Get Registered?

Every Employer paying salary to employees over Rs 7500/- (for female employees Rs 10,000) has to get Profession tax PTRC number.

Every Business entity viz, Sole proprietor, LLP, company, society, etc has to get profession tax PTEC number

How To Get Registration (PTRC/ PTEC Number)

The registration is online through https://www.mahagst.gov.in/ website.

Documents Required For Registration

Following basic documents are required for Profession tax registration; PAN, Adhar, residential address proof, business address proof, incorporation document of the entity via LLP agreement, MOA/AOA in case of company, Byelaws in case of society, photographs of the partner, proprietor, director, officer, bank account details (with canceled cheque)

Payment Of Profession Tax

Profession tax deducted from the salaries of employees are required to be deposited to Government every month (the due date is the last day of next month) under PTRC number. In case the total liability of previous year does not exceed Rs 1 lakh, the employer may deposit profession tax annually. In that case, the due date is the 31st of March of the year.

Profession tax of the entity ( PTEC) is to be deposited in advance by 30th June every year. The government offers discount if advance payment is done for next year(s).

The payment can be done through https://www.mahagst.gov.in/

Filing Of Returns

There is no return for PTEC holders.

For PTRC holders,–Monthly returns are to be filed if, i) it is a first year of registration ii) in case the yearly liability of the previous year exceeds Rs 1 Lakhs. The due date is the last day of the next month.

All other PTRC holders can file a yearly return by a 31st march of the respective year.

Non Compliance Consequences.

Late fee for non-filing of PTRC return- Rs 1000/- per return

Interest on delayed payment- @ 1.25% per month.

Profession Tax Assessment

The profession tax department may ask the records related to profession tax ( PTRC) for assessment via copies of returns, Challans, profession tax working, reconciliation of salary and wages shown in PTRC returns, and that of financial statements of the entity. The time limit is 8 proceeding years.

Exemptions

Following is the partial list of exempted persons;

  • Any person suffering from permanent physical disability as specified in Rules
  • Parents/ guardians of the child suffering from permanent physical disability as specified in Rules
  • Any person and parents or guardian of such person who is suffering from mental retardation as specified in rules.
  • Partnership firm ( but not LLP)
  • HUF
  • Professionals like Legal practitioner, CA, CS, CWA, and other covered under entries no 2 & 4 of profession tax up to one year of standing in the profession.

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