Till March 2009 I was working in an organisation as an employee and I am also serving as a Director in a company. Company was deduting Profession tax from my salary. I would like to know following: 1. Shall I am eligible to pay profession tax as a direcor, when I am an employee of one organisation and they are deducting profession tax from salary? 2. From April 2009 I am working in the same organisation as a consultant and I am also continuing with the directorship in another company. What steps shall I take to comply with the law.
Though I am working as a consultant and I am not professionally qualified but appointed as a consultant due to tenure of service and can't continue as an employee due to crossing of age limit of 60 years.
If I need to pay professional tax what steps should I take?
Also request to tell me that whether company is also liable to pay professioanl tax yearly? If not paid for last few years, what shall be done to rectify the defect?
10 August 2024
Here's a detailed guide to address your queries about Professional Tax (PT) in Maharashtra:
### **1. Eligibility and Payment of Professional Tax as a Director:**
1. **As an Employee and Director:** - **Employee:** If your salary was subject to PT deduction while you were an employee, then your employer was responsible for deducting and remitting PT on your behalf. - **Director:** If you continue as a Director in another company, you may be liable to pay PT on the income you receive from directorship, depending on whether you are receiving a salary or honorarium. The PT liability for directors is separate from that of employees.
2. **Consultant and Director (April 2009 Onwards):** - **Consultant:** As a consultant, you need to ensure that you comply with PT requirements. Consultants are considered professionals and are liable to pay PT under PTEC (Professional Tax Enrollment Certificate). - **Director:** You will need to obtain a separate PTEC if you are earning income from your directorship, as it is treated as a separate source of professional income.
### **Steps to Comply with Professional Tax Law:**
1. **For Consulting Role:** - **Obtain PTEC:** Apply for a Professional Tax Enrollment Certificate (PTEC) if you haven’t already. This is required for individuals earning professional income. - **Pay PT:** Pay the applicable PT based on the slabs set by the Maharashtra State Government. The tax is calculated based on your income or professional earnings.
2. **For Directorship:** - **Review PT Liability:** Confirm whether you need to obtain a separate PTEC for income from directorship. Typically, directors who receive remuneration or honorarium must comply with PT requirements.
3. **File Returns:** - **Monthly/Quarterly Returns:** If applicable, ensure you file PT returns as per the requirements (generally quarterly or annually, depending on the jurisdiction). - **Record Keeping:** Maintain records of all PT payments and returns for future reference and compliance.
### **Company’s Liability for Professional Tax:**
1. **For Employees:** - **Company Responsibility:** The company is responsible for deducting and remitting PT on behalf of its employees (PTRC – Professional Tax Registration Certificate). - **Non-compliance:** If the company has failed to pay PT for past years, it should rectify the situation by filing the overdue returns and paying any outstanding dues along with penalties.
2. **Rectification:** - **Check Arrears:** Verify the outstanding amounts and any penalties applicable for late payment. - **File Overdue Returns:** Submit all overdue PT returns for the respective years. - **Pay Dues:** Make the necessary payments including any penalties to the Maharashtra State Tax department.
### **Specific Steps for Rectification:**
1. **Obtain PTRC:** - Ensure the company has a valid PTRC if not already done.
2. **File Outstanding Returns:** - Contact the Maharashtra State Tax department or use their online portal to file any missing PT returns for the past years.
3. **Pay Penalties:** - Be prepared to pay any penalties for late payment along with the outstanding PT.
4. **Consult a Tax Professional:** - Given the complexities, consulting with a tax professional or accountant is advisable to ensure compliance and correct any issues with PT payments and filings.
### **Summary:**
- As a director, you are responsible for paying PT on income earned from directorship. Obtain a PTEC for this purpose. - For your consulting role, you should have a PTEC and pay PT accordingly. - The company must deduct and remit PT for its employees under PTRC. - Rectify any non-compliance by filing overdue returns and paying any outstanding amounts and penalties.
For detailed procedures, you may contact the Maharashtra State Tax department or consult a tax professional for accurate guidance.
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