A person engaged in any profession, business, or calling of an economic nature in Maharashtra needs to pay professional tax. Non-compliance can result in penalties, as payment of professional tax is mandatory. Although tax rates can vary from one State to another, the upper limit for deduction as professional tax is Rs. 2,500 annually.
You often see professional tax deductions on your salary slip every month, and it’s essential to understand what this tax is and the associated information.
Professional Tax in Maharashtra
According to the applicable income ranges and tax rates on salary, the state government of Maharashtra levies a professional tax on wages for the workforce employed in the private or public sector, as well as those who are self-employed and engage in any venture or occupation
The limits for professional tax extend between Rs 2,100 and Rs 2500 per year. The optimum limit for professional tax in Maharashtra amounts to Rs. 2,500. Salaried employees, on their part, can claim a reduction in their professional tax payment under the previous system of the Income Tax Act.
The imposition and administration of professional tax in Maharashtra are controlled by the Maharashtra State Tax on Professions, Trades, Callings and Employments Act,1975.
Additionally, the tax brackets for men and women differ with respect to professional tax in Maharashtra. Employers of salaried employees or those who run their services or businesses must obtain a registration certificate or enrolment certification as verification from the designated authority. In addition, your application for registration or enrollment should be submitted within one month of launching your business or occupation.
Primarily, professional tax extends not only to employees but also covers the directors, co-founders, and business associates.
Applicability of Profession Tax in Maharashtra
Professional tax concerns these sections of individuals, namely:
- Hindu Undivided Families
- Company/partnership of a person/Co-operative Society
- Individuals making earnings through self-employment or occupation. It refers to business proprietors, freelancers, and salaried employees. Even chartered accountants, medical professionals, lawyers, and others fall under its purview. Employers deduct it from salaries and deposit it to the municipal corporation, while those who are self-employed pay professional tax directly.
Mandatory Documents for Professional Tax
The accompanying documents must be submitted for Professional tax registration in Maharashtra.
- Certificate of Incorporation
- Company: MOA and AOA and LLP Agreement
- Proof of residence of the enterprise, together with an NOC from the property holder or owner of the premises
- PAN card of LLP/Company, which is authenticated by the director of the company.
- Bank account information of the company (Cancelled cheque or Account statement)
- Address and proof of identity and photographs (passport size) of all the directors/partners
- Telephone number and Email ID
Professional Tax Registration in Maharashtra
Step 1: Submission of Application
Apply by completing Form 1 within 30 days of becoming liable for tax obligation. This can be accessed on the official website.
Step 2: New Registration
Access the ‘New Registration’ section on the website and submit the relevant documents by uploading.
Step 3: Give PAN and TAN
Specify PAN (Permanent Account Number) and TAN (Tax Deduction Account Number).
Step 4: Utilize the Activation Link
An activation link is dispatched to the registered mobile number and email. Utilize this link to gain user access or login credentials.
Step 5: Login and Submit the Form
Log in and gain access with the acquired credentials and click on ‘New Registration’. Choose the Maharashtra State Tax on Professions, Trades, Callings, and Employments Act, 1975. Form II will be made available.
Step 6: Submission Particulars
Furnish applicant information, utility details regarding electricity, scanned copies of applicable documents, bank account details, and rental details or agreements.
Step 7: Acceptance and Confirmation
Once you submit the form, you’ll get an acceptance and confirmation that shows when you registered
Step 8: Submission and Signing
The owner, director, or partner needs to sign the application to make it official. Then, hand over the application to the right professional tax registration office.
Step 9: Registration Confirmation
After the acceptance of the application, Form 1-A presents the professional tax registration along with a Tax Identification Number (TIN)
Tax Slab Rates of Professional Tax in Maharashtra
The appropriate income bracket and rate of professional tax in Maharashtra vary for men and women employees. To know more, take a look at the table below:
| Monthly Gross Salary | Charged Professional Tax | Observations |
| Till Rs 7,500 | Zero | For Male Employees |
| Rs 7,501 – Rs 10,000 | Rs 175/month | For Male Employees |
| Rs 10,001 and upwards | Rs 200 every month, barring February
Rs 300 for the month of February |
For Male Employees |
| Till Rs 25,000 | Zero | For Female Employees |
| Higher than Rs 25,000 | Rs 200 every month, barring February
Rs 300 for the month of February |
For Female Employees |
Online Payment For Professional Tax in Maharashtra
After familiarizing yourself with the tax bracket rate and the purview of the professional tax, let us take a look at the payment procedure of this state-level tax.
Step 1: Check out the Maharashtra GST Department’s official website and press the “e-payment option’.
Step 2: Based on your professional tax payment status, select the corresponding option.
Step 3: Then, choose the relevant professional tax act. You can opt for either the PTEC (Professional Tax Enrolment Certificate) or the PTRC (Professional Tax Registration Certificate) Act.
Step 4: Once you pick the right option, fill in the details you need to. This includes how much you’ll pay when you pay it, and your phone number, plus a few other things
Step 5: Hit ‘Proceed to Payment’.
Step 6: When your payment goes through, you’ll see a message on the screen that lets you know it worked. You can capture the screenshot or download it for future use.
Additionally, you can also transfer money for payment using a different procedure. Carry out these steps.
Step 1: Surf the official website of the Sales Tax Portal of GRAS (Government Receipt Accounting System) and select the type of tax.
Step 2: Furnish appropriate TIN. On behalf of PTRC, fill in the 12-digit TIN; On behalf of PTEC, fill in the 11-digit TIN.
Step 3: Now tap the ‘Submit’ option. Subsequently, fill in the essential information such as your telephone number, office site, or employer name.
Step 4: Pick the payment type. After the automatic generation of ID, choose the payment period or schedule.
Step 5: Complete all the payment-related information and tap the ‘Proceed’ option. Your screen will now display a payment summary.
Step 6: Press ‘OK’ after checking all the details. You will view a Government Reference Number.
Step 7: Now tap ‘OK’, and you will get redirected to the bank’s website. After a successful payment transaction, a receipt will be generated. If you want, you can download it.
How do PTEC and PTRC Registrations differ?
For Professional Tax Registration in Maharashtra, both the Professional Tax Enrolment Certification (PTEC) and the Professional Tax Registration Certificate (PTRC) are mandatory. These certificates are necessary for the legal operation of businesses and to submit professional taxes to the State.
The PTEC permits the payment of professional tax by businesses covering both sole proprietors and professionals. At the same time, the PTRC permits the employer to deduct and deposit the professional tax from the salary of their employees and transfer it to the government.
A firm or enterprise requires both PTEC and PTRC to remit their professional tax and that of their employees. If the company or Limited Liability Partnership does not have any salaried employees, only PTEC is necessary.
Due Date of Professional Tax Payment in Maharashtra
In Maharashtra, the enrolment date determines the cut-off date for payment of professional tax.
- Businesses enrolling prior to May 31 of a current year must pay the tax obligation by June 30 of that year.
- Businesses enrolling after May 31 of a fiscal year must fulfil their professional tax liability within one month following the enrolment date.
Penalty for Late Payment
A penalty of 1.25% is charged monthly if professional tax is unpaid after enrollment. For employers, a payment of 2% interest is charged on the total due amount for failure to make tax payment or any delay.
Tax-Free Individuals from Professional Tax Payment
Refer to the following list to learn about the professional tax-free individuals in Maharashtra.
- Senior citizens in the 65 years and above age group
- Parents of children who are physically disabled or challenged
- A person possessing above 40% disability
- Badi workers who belong to the textile industry.
Conclusion
It is a legal obligation to register for professional tax in Maharashtra; if you neglect to do so, it will accrue interest and penalties. Tax money is important to fund the Government’s programs for things like health, education, and the betterment of society. If you earn an income in Maharashtra, payment of professional tax is mandatory. What is unique about the tax-paying system is that there is a different tax slab for men and women, and it is a direct tax charged by the state government in India. Owning a Professional Tax Registration certificate signifies that a business or a person has met their tax obligations responsibly and is fully compliant with the local tax regulations.
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