Profession Tax Definition, Compliance and Applicability
Profession Tax is levied on the Income of a person earned by way of profession, trade, calling and/or employment even though the tax payer may already be paying Income tax. The difference between Income tax and Profession tax is that Profession tax is levied and collected by the State Government whereas Income tax is levied by the Central Government.
Another important point is that not all States levy profession tax. Where it is so levied, it is determined as per the slab applicable on the assessee. The slabs differ for each State. However Profession tax collected by any person cannot exceed Rs. 2500 p.a.
Any amount paid as profession tax is allowed as a deduction from 'Salary' in Form 16 while computing Income chargeable for Income Tax purposes.
In case of Salaried/Wage earners, responsibility of deducting and paying Professional Tax to the Government is on Employer. In case of others, the responsibility for payment of professional tax is on the tax payer itself.
Every person liable to pay Professional tax should get himself registered with the prescribed authority in the prescribed form.
PROFESSION TAX is not applicable on all states. Find out which states levy profession tax in this chart.
PROFESSION TAX - SPECIFIC TO MAHARASHTRA, WITH LATEST AMENDMENTS TO ACT
Profession Tax in Maharashtra is governed by Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975.
REGISTRATION andamp; ENROLLMENT :-
Every employer or person required to obtain a certificate of registration or enrolment shall within 30 days of his becoming liable to pay tax aapply for a certificate of registration or enrolment to the prescribed authority in the prescribed form.
The prescribed authority shall, after making such inquiry as may be necessary within thirty days of the receipt of the application grant him such certificate if the application is in order
The prescribed authority shall mention in every certificate of enrolment the amount of tax payable by the holder according to Schedule I, and the date by which it shall be paid, and such certificate shall, subject to the provisions of the proviso to sub-section (3), serve as a notice of demand for purposes of section 10.
Where an employer or a person liable to registration or enrolment has failed to apply for such certificate within the required time, the prescribed authority may, after giving him a reasonable " opportunity of being heard, impose penalty of Rs. 5 for each day of delay in case of such employer and Rs. 2 for each day of delay in case of such person.
Where an employer or a person liable to registration or enrolment has given false information in any application submitted under this section, the prescribed authority may, after giving him a reasonable opportunity of being heard, impose a penalty equal to three times the tax payable under the Act.
QUANTUM OF TAX :-
The amount of profession tax applicable on different tax payers can be found out here.
PAYMENT OF TAX :-
1) E-payment is made mandatory to all PTRC holders w.e.f. 1/7/2012 vide Government Notification No PFT.1012/ C.R.29/ Taxation-3 Date 14-June-2012.
2) Tax is to be paid in chalan no MTR-6.
3) The amount of tax due from enrolled persons for each year as specified in their enrolment certificates shall be paid-
(a) In respect of person who stands enrolled before the commencement of a year or is enrolled on or before 31st May of a year
Before 30th June of that year or such later date as the Commissioner may by notification in the Official Gazette, specify in respect of that year
(b) in respect of a person who is enrolled after the 31st May of a year
Within one month of the date of enrolment,
(c) in respect of a person who is enrolled and the rate of tax at which he is liable to pay tax is revised.
Within one month of the date of such revision.
4) Any person holding a certificate of enrolment and liable to pay tax at the rate of rupees 2500 per annum, may discharge his liability for a total continuous period of five years by making payment in advance of a lump sum amount equal to four times of such rate of tax, on or before the 30th June of the year.
5) If any such lump sum payment is not made on or before such date, but is made on or before the end of the year, such person shall be liable to pay an additional lump sum amount for the period of delay at the rate of rupees 200 per month, in addition to the amount of lump sum payable as above.
6) Any increase or decrease in the rate of tax shall not vary the liability of tax payable by such person who has paid such lump sum amount in lieu of tax
FILING OF RETURN :-
1) Online return should be submitted in Form IIIB. Before submission of online return, Employer has to enroll himself for e-services (one time activity).
2) Filling of e-return for all PTRC holders is made mandatory vide Government Notification VAT/AMD.1010/IB/PT/Adm-6 Date 14/7/2011
Tax Liability during PREVIOUS Year
Due date for e-return filing
Tax Liability is less than Rs. 50,000
31st March of Financial Year to which return relates
Tax Liability is equal to or more than Rs. 50,000
Last date of month to which return relates
3) Every such return will be filed with a treasury challan in proof of payment of full amount of tax due according to the return, and a return without such proof of payment shall not be deemed to have been duly filed.
4) Where an employer has failed to file such return within the prescribed time, he shall pay, by way of a late fee, Rs. 1000 before filing of the said return. This amount shall be in addition to the amount payable, if any, as per the return.