What is Professional Tax in Maharashtra- An Overview
Professional Tax is levied by the state government on profession, trade or employment which is applicable to salaried employees and professionals such as chartered accountants, lawyers, and doctors. The power of levying professional tax by the state government is given under article 276 of the Constitution of India.
According to the Maharashtra State Tax on Professions, Trades, Callings and Employment Act, 1976 professional tax in levied on all forms of individuals whether being salaried or non-salaried individuals. Even corporate entities are liable to pay professional tax in Maharashtra.
In the case of employment, at the time of making payment of salary, the professional tax is deducted by the employer. The rate of professional tax depends upon the state in which employee is serving his duties. State government uses different methods for collection of professional tax like collection through the separate department or through Municipal Corporation / Panchayat.
Any individual or employee has to pay the requisite amount of professional tax in Maharashtra in order to avoid penalty. For this purpose the individual or employee requires to obtain the enrolment certificate for professional tax payment in Maharashtra.
What is the Main Regulatory Authority for Professional Tax in Maharashtra?
The Main act which regulates professional tax in Maharashtra is the Maharashtra State Tax on Professions, Trades, Callings and Employment Act, 1976. All entities, individuals, companies incorporated in Maharashtra would have to pay professional tax as per the requirement of the relevant state authority.
Benefits of Professional Tax in Maharashtra
The following are the benefits of professional tax in Maharashtra
- Compliance with the rules- Any individual paying specific amount of professional tax would be compliant with the rules of the government of Maharashtra.
- Government Collections- By proper payment of professional tax in Maharashtra, the government would have specific amount of collections.
What is Professional Tax Registration in Maharashtra?
In Maharashtra Professional Tax, the professional tax is levied as per the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975.
Professional tax is levied on individuals as well as organizations such as Partnership Firm, Company, Sole Proprietorship, Hindu Undivided Family (HUF), Society, Association of Persons, Corporation or any other corporate body.
- In case of Individuals:
In Maharashtra Professional Tax, it is required for every person involved in any profession, trade, calling or employment to obtain a Certificate of Enrollment from the Profession Tax Authority. After obtaining a certificate, the individual tax liability can be discharged by the person for a period of five years by paying a lump sum amount in advance equal to the Profession Tax amount for four years. It will give relief from the payment of one year. However, there is an exemption for senior citizens (above 65 years), handicap person (40% disability), and parents of the physically disabled person or mentally retarded child.
- In the case of organizations:
It is mandatory for the employer organization to get them registered and obtain registration certificate as per the profession tax act so that payment can be made in respect of tax deducted from employees.
Procedure for Registration of Professional Tax in Maharashtra
- Go Online- First the applicant has to go online to the website https://www.mahagst.gov.in/en (Department of Goods and Service Tax). Then the applicant has to click on Other Acts Registration’.
- Click on New Registration- In the second step the applicant has to click on new registration and the applicant would be redirected to another page. On this page the applicant would have to read the guidelines and documents required to be uploaded. If you are a new dealer, then click on new dealer.
- Provide the Information- Here the applicant would have to provide information related to PAN and TAN number. After this an activation link would be sent to the applicant registered mobile number and email. Through this the applicant would receive new login credentials.
- The applicant has to go back on the home page and click on e-services and then select Vat and allied acts. The applicant would be asked to reset the password. After this is completed, the applicant would have to ensure that ‘new registration’ is clicked on. After this process the applicant will have to click on Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975. Form II would be provided to the applicant.
- Provide the individual details of the applicant. Utility information related to electricity and rent has to be submitted. Bank details would also have to be provided by the applicant.
- The entry number and category has to be entered by the applicant. The category of the applicant would be present in the relevant annexure.
- Upload Documents- In the next step, the applicant would have to upload scanned copy of the documents in the online portal for professional tax in Maharashtra.
- Secure the Unique Enrollment Certificate- In the final step, the applicant would receive an acknowledgement and unique enrolment certificate.
Documents required for Professional tax in Maharashtra
- Pan of the assessee
- Aadhaar Card copy
- Cancelled Cheque
- Passport size photo
- Utility Bills such as Water or Electricity
- Photo Signature
- Information related to the business
- Employees at Workplace
- Date of Commencement of business
- Email ID and Mobile no of the individual
Revised Professional Tax Return
In case of any omission or incorrect statement has been furnished then one can file revised professional tax return in Maharashtra. However, a revised return can be filed before a notice for assessment is served or before the expiry of six months period from the end of the year in which the professional tax return was due.
What is the due date of payment of Professional Tax in Maharashtra?
Professional tax payment is done on the basis of enrolment in Maharashtra. In case the enrollment is done before the commencement of a year on or before 31st May due date is 30th June. If the entity got enrolled after 31st May, then the payment of professional tax will be due within one month of the enrolment in Maharashtra.
What will be the penalty provisions regarding professional tax in Maharashtra?
There are heavy fines & penalties in case of non-compliance with the Professional Tax regulations in Maharashtra.
- The penalty in case Professional Tax Registration is not obtained
If professional tax registration is not obtained then there is a penalty of Rs. 5 per day in case of an employer and Rs.2 in case of a person.
- The penalty in case of Late Payment of Professional Tax
There is a penalty of 10% of the tax due in case of late payment of professional tax. Along with this, an interest up to 1.25% per month can be charged on late payment. However, in case person or employer fails to comply with the Maharashtra Professional Tax Act then authority may impose a penalty of not more than Rs.5000.
- The penalty in case of Late Filing of Professional Tax Return
In case of late filing of professional tax return, there is a penalty of Rs.1000. The amount of penalty is payable in addition to the amount payable for return.