Profession tax-ptec

This query is : Resolved

Veeral Kurwa (Querist)
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19 December 2015 Sir/Madam,
two people have been working as employees and their profession tax has been deducted by the specific employer. Now, they have formed a new company, and hence they are the directors of the said company. Will they get the amount paid in ptrc as a deduction from the PTEC payable by them?

Veeral Kurwa

Veeral Kurwa (Querist)
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05 May 2016 kindly solve my query as soon as possible.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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10 August 2024 In Maharashtra, the Professional Tax (PT) system distinguishes between two types of registrations: **PTRC (Professional Tax Registration Certificate)** for companies to deduct and pay tax on behalf of their employees, and **PTEC (Professional Tax Enrollment Certificate)** for individuals (including directors) who are liable to pay tax on their professional income.

### **Key Points Regarding PTRC and PTEC:**

1. **PTRC (Professional Tax Registration Certificate):**
- **Purpose:** This is for employers to collect and remit PT on behalf of their employees.
- **Usage:** Applies to the company's employees, including those in the role of directors who receive a salary.

2. **PTEC (Professional Tax Enrollment Certificate):**
- **Purpose:** This is for individuals who are liable to pay PT on their professional income or business income.
- **Usage:** Applies to individual directors or proprietors who earn income from their profession or business.

### **Your Situation:**

- **Previously Deducted PT:** The two individuals were previously employed, and their PT was deducted by their employer under PTRC.
- **New Company:** They have now formed a new company and are directors of this company.

### **Addressing Your Query:**

1. **Deduction Transfer:**
- **No Direct Transfer:** There is no direct provision to transfer the PT deducted under PTRC from a previous employment to offset the PTEC payable by the same individuals now as directors. The PT deducted by the employer (PTRC) is not transferable to the directors’ own PTEC liability.

2. **New PT Liability:**
- **Separate Liability:** As directors in the new company, they need to obtain their own PTEC and pay PT on their professional income if it is applicable. The PT previously deducted under PTRC for their former employer cannot be used to offset their PTEC liabilities.

3. **Claiming Credit or Adjustment:**
- **Possible Adjustment:** If they have paid PT in advance or overpaid under their previous employment, they can claim a refund or adjustment from the PT authorities for the previous company. However, this does not directly affect their PTEC liabilities.

4. **Filing and Compliance:**
- **Obligations:** They should ensure that they comply with their PT obligations as directors and file their PTEC returns accordingly. If they are not liable under PTEC due to low income or other reasons, they must still adhere to the compliance requirements.

### **Steps to Take:**

1. **Obtain PTEC:**
- Ensure that the new company and individual directors obtain their respective PTEC and comply with PT payment requirements.

2. **Consult with PT Authorities:**
- Contact the Maharashtra State Tax department or a tax professional to clarify any specific details or claims regarding past PT payments and to ensure proper compliance with both PTRC and PTEC.

3. **Maintain Records:**
- Keep detailed records of all PT payments and deductions, including PTRC and PTEC payments, to manage any future queries or adjustments.

For precise guidance and to address specific queries regarding PT deductions and credits, consulting a tax professional or the Maharashtra State Tax department is advisable.

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