Professional tax - where to pay when LLP and partners are located in different states

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HR (Querist)
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26 January 2024 My business is registered under an LLP. The registered office of the LLP is in Pune, Maharashtra. The LLP has only 2 partners and both resided in Pune at the time of opening the LLP. Professional Tax (PT) registration was done for LLP and both the partners with Maharashtra PT department and tax was paid accordingly. The nature of business is service-based and it is provided online to clients across the country. GST registration is not applicable. There are zero employees, partners do all the work of LLP; so no PTRC enrolment for LLP, only PTEC enrolment for LLP & both partners.

Now, both the partners have relocated to Bangalore, Karnataka. The LLP continues to be registered in Pune. My queries are as follow:

1) While the LLP pays PT in Maharashtra, can the partners continue to pay PT to Maharashtra as before?
2) If partners try to register with Karnataka government, they may be a demand to pay PT for the partners by both Maharashtra and Karnataka. Can we skip registration with Karnataka Professional Tax department?

Note: It is not feasible to move the LLP registered office to Bangalore (as it would be unnecessary from MCA standpoint, besides being cumbersome & expensive). We would want to leave the regd. office in Pune as it is.

Thank you.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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10 July 2024 Given your situation with an LLP registered in Pune, Maharashtra, and partners relocating to Bangalore, Karnataka, here are answers to your queries regarding Professional Tax (PT) obligations:

### 1) PT Payment for LLP and Partners

- **LLP in Maharashtra**: Since your LLP is registered in Pune, Maharashtra, it should continue to pay PT to the Maharashtra PT department as per the Maharashtra PT rules. This is based on the location of the LLP's registered office.

- **Partners' PT Payment**: Previously, both partners were paying PT to Maharashtra as they resided there. Even after relocating to Bangalore, they can continue to pay PT to Maharashtra. Maharashtra PT rules allow individuals to pay PT based on their employment or engagement in Maharashtra, regardless of their current residence.

### 2) Registration with Karnataka PT Department

- **Partners in Karnataka**: Karnataka PT laws require individuals to pay PT if they are engaged in a profession, trade, or employment within Karnataka. Since the LLP is registered in Pune and the partners are not engaged in any professional activities in Karnataka (assuming they are only involved with the LLP's activities remotely), they may not be required to register or pay PT in Karnataka.

- **Skipping Registration**: Given that the partners are not physically working or operating from Karnataka but are continuing to manage the LLP's affairs from there, they may not meet the criteria for PT registration in Karnataka. However, it’s advisable to review Karnataka PT laws or consult with a local tax advisor to confirm this.

### Conclusion

- **Maintaining Pune Registration**: It is feasible and appropriate to maintain the LLP's registered office in Pune while the partners reside in Bangalore. This setup aligns with the operational and compliance requirements under the LLP Act and PT regulations.

- **Continued PT Payment to Maharashtra**: The partners can continue to pay PT to Maharashtra based on their association with the LLP in Pune, even after relocating to Bangalore, as long as they are not engaged in any professional activities in Karnataka.

- **Consultation**: For specific and updated guidance tailored to your situation, especially regarding Karnataka PT laws, consulting with a local tax advisor or the Karnataka PT department directly would provide the most accurate advice.

By following these guidelines, you can ensure compliance with PT regulations while managing the operational aspects of your LLP effectively across different states.