Profession Tax on Employees in Maharashtra
Profession tax also called tax on employment is imposed by a state under article 276 of the Constitution of India. This tax is deducted from the salary of an employee every month. The profession tax amount is considered exemptible from taxable income of the employee.
Profession Tax is imposed upon professions and employments although the employee is already paying an income tax. As per Article 276, Constitution of India, the total amount payable to any one municipality, local board, district board, or any other legislative agency in the state by way of taxes on Professions, Trades, Callings and Employments is not supposed to exceed Rs. 2,500 p.a.
Employer who must have a certificate of enrollment from tax government department is defined as a person or officer who is answerable for payment or salary or wages of the employee. This authority is supposed to be the head of the office of any establishment or employer.
- An Employer having more than one place of work, will have to apply separately to each authority as regards the place of work coming under the jurisdiction of that authority.
- Company hiring many persons has to pay profession tax since being engaged in trade and needs to have certificate of enrollment.
- Every Employer has to receive a certificate of Registration within Thirty days from the date of becoming able to pay Profession Tax.
- Each person liable to pay tax under this Act has to receive a Certificate of Enrollment in the prescribed manner from the prescribed authority.
- If a person is in employment of any diplomatic office, office of consulate, or trade commissioner of foreign country located in any part of the state, he or she has to obtain a certificate of enrollment in case he or she is liable to pay tax and pay the tax by themselves. These offices don’t have to get certificate of registration. If any foreigners are employees in these offices then they are not liable to pay profession tax.
- If a person who has to apply for a certificate of enrollment, and has several work places within State of Maharashtra, he or she will need to submit one application for all places of work. He is supposed to give one name of place of work as main place work and submit the application to an authority under whose jurisdiction, the main place of work is located.
Profession Tax Slab for Salaried Employees in Maharashtra
|Salary or Wages
|Rs.5,001/- to Rs.10,000/-||Rs.175/-|
|Rs.10,001/- and above||Rs.200/-*|
|* Rs.300/- for the month of February|
The employer is supposed to deduct tax as per above mentioned rates and deposit with Government. However even if profession tax not deducted, employer is liable to pay tax. For this purpose the Employer should obtain the Registration Certificate from Department within 30 days from date of his liability. The employer should also file the returns and pay taxes as per monthly/quarterly/annual return which ever is applicable to him, determined as per tax liability.
Liability to File Return and Payment of Tax for Employer (From 1-4-2011) onwards
|Tax Liability||Periodicity||Months of salary to be covered||Due Date|
|Less than Rs. 50,000 in previous year||Annual||March of the previous year and April to February of the current year||31st March|
Rs. 50,000/- or more in previous year
Salary of previous month
End of the month for which return is filed
In case of first year of registration
|Monthly||Salary of previous month||
End of the month for which return is filed
With effect from 1st February, 2011, an Assessee whose Profession Tax liability during the previous year is Rs. 20,000 or more is required to upload his return in Electronic Mode. (Refer Notification No. VAT/AMD-1010/IB/PT/ADM-6 dated 26-11-2010) and is thus able to make payment of Profession Tax in Form MTR-6.
Profession Tax Penalties
- Delays in obtaining Enrollment , a penalty of Rs. 2/per day and for Registration, a penalty of Rs. 5/- per day.
- Providing false information regarding enrollment – Penalty of 3 times of tax amount.
- Non-payment or late payment of profession tax – Penalty is equal to 10% of the amount of tax to be imposed.
- Late filing of Returns – Penalty of Rs. 300 per return.
Profession tax are exempted in the following cases,
- Senior Citizen above 65 years age is tax exempt.
- Person suffering from permanent physical disability.
- Parent of a child suffering from physically disability.
- Parent of a mentally retarded child.