Professional tax

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NIKET GOEL

NIKET GOEL (Querist)
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25 March 2015 Who are liable to pay professional tax?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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25 March 2015 Which state you are based at??

In Maharashtra-

SCOPE

Every person engaged actively or otherwise in any profession, trade, calling or employment and falling under one or other classes mentioned in Schedule I of the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 is liable to pay, to the State Government, tax prescribed under the said Schedule. [S. 3(2)]

Persons earning salary or wages are also covered. Employers are required to deduct Profession Tax, at prescribed rates, from salary/wages paid to employees, and to pay the tax to State Government on behalf of employees. Employer is liable to pay tax irrespective of deduction. (S-4)

Where any employee is covered by one or more entries other than entry 1 in Schedule I and rate of tax under any such other entry is more than rate of tax under entry I of that schedule and if he issues to his employer, a certificate in Form IIB, or where employee is simultaneously engaged in employment of more than one employer and if such employee issues to his employer, a certificate in Form IIC, the employer(s) has not to deduct tax from the salary/wages payable and such employer(s) are not liable to deposit tax on behalf of such employee.

REGISTRATION AND ENROLMENT

Section 5 — every person liable to pay tax u/s. 4 shall obtain a Certificate of Registration, and every person liable to pay tax u/s. 3(2) shall obtain a Certificate of Enrolment from prescribed authority in prescribed manner.

Application for enrolment/registration shall be made within 30 days from date of commencement of profession, trade, calling or employment or within 30 days of becoming liable to pay tax under the Act.

Application for enrolment and application for registration have to be made online, w.e.f. 1st April 2012, in Form I and II respectively, (Ref.: Cir. No. 5T dated 31st March, 2012).

Where a person liable for registration/enrolment has wilfully failed to apply for such certificate within required time, the prescribed authority may, after a reasonable opportunity of hearing, impose penalty @ ₹ 5 (registration)/₹ 2 (enrolment) per day of delay.

The prescribed authority shall make such inquiry as may be necessary within 30 days of receipt of application, and if it is in order, shall grant certificate.