PROFESSIONAL TAX

Professional tax is a tax that is imposed by a state government on all individuals who are earning a living through any medium. Professional tax is imposed on income derived from all kinds of trades, employment and profession. This is a tax that is to be paid by every single earning individual who can be employees, freelancers, professionals, etc.

The tax varies from state to state and is subject to maximum limit of Rs. 2500/-

Professional tax in Maharashtra

• Professional tax is collected by the employers from the monthly salaries of employees. It is the responsibility of employers to unfailingly collect and make payment of professional tax to the respective state government.
• Employer (corporates, partnership firms, sole proprietorship, etc.) also being a person carrying on trade/profession is required to pay professional tax on his trade/profession.
• Individuals who are freelancers carrying business without employers are also required to register themselves and pay the professional tax on their business.

PTRC (Professional Tax Registration Certificate): Allows the employer to deduct and deposit professional tax to and from the salary of its employees.
PTEC (Professional Tax Enrollment Certificate): Allows the company to pay the company’s and their director’s professional tax.

A company needs to obtain both PTRC and PTEC to pay its own professional tax and professional tax for all its employees.
Only PTEC is required to be obtained when a company has no employees. This is especially the case for professional practitioners such as Doctors, CAs, etc.

Professional Tax Registration is mandatory and must be obtained within 30 days of employing staff in a business. Professional Tax Registration is mandatory and must be obtained within 30 days from the start of the operations of business, in the case of professionals.

Documents required for PTEC & PTRC Registration

• Electricity bill of principal place of business.
• Address proof of principal place of business.
• Bank statement.
• Photographs.
• Aadhar card.
• PAN card.
• Residential Proof of partner, director, proprietor.
• Mobile and Email ID.
• NOC from the owner of the principal place of business.

DUE DATE FOR PTEC:
Every enrolled person shall pay the tax within one month from the date of enrolment in the first year, thereafter by 30th June of every year.

DUE DATE FOR PTRC:
In case of new registration, the employer shall file monthly return, from the first date of liability till 31st march of that particular financial year. After the completion of first financial year, the periodicity of payment of professional tax shall be subject to the following conditions:

If tax liability during the previous year or part thereof was less than Rs. 50,000 = Annual Return on or before 31st March of the year (for salary paid for the months from 1st March to 28th February)

If tax liability during the previous year or part thereof was Rs. 50,000 or more = Monthly Returns on or before the last day of the month (covering salary paid for the preceding month)

INTEREST ON DELAYED PAYMENTS:
Interest on delayed payment of both PTRC and PTEC payments for first month is @ 1.25% p.m., for next two months is @ 1.50% p.m. and thereafter is @2% p.m.