Professional Tax in Maharashtra: Registration and Filing

Introduction

Professional Tax in Maharashtra is a state-level tax that applies to individuals and businesses who earn income through professions, trades, callings, and employment. It is governed by the Maharashtra State Tax on Professions, Trades, Callings, and Employments Act, 1975. This tax is levied on various professionals, such as employees, business owners, consultants, freelancers, and traders.

For salaried employees, employers are responsible for deducting professional tax from their wages and ensuring that it is deposited with the state government. Self-employed individuals must make direct payments to the government.

The Maharashtra tax compliance requirements for businesses are strict, and non-compliance with Maharashtra tax compliance can result in fines and penalties. Both employers and self-employed individuals need to understand the importance of state tax filing and the process of submitting professional tax returns.

By complying with Maharashtra tax compliance regulations, businesses and professionals avoid unnecessary legal troubles and penalties. Additionally, adherence to business tax rules ensures that both individuals and organizations can continue to operate without interruption.

What is Professional Tax in Maharashtra?

Professional Tax in Maharashtra is essentially a tax on income earned through professions, trades, callings, and employment. The tax is imposed under the Maharashtra State Tax on Professions, Trades, Callings, and Employments Act, 1975. The rate of this tax varies depending on the income levels of the individual or business entity.

Maharashtra tax compliance entails that businesses must ensure that professional tax is deducted from employees’ salaries if they exceed the minimum threshold, and self-employed professionals must manage the payment independently.

For salaried individuals, employers are responsible for the deduction of professional tax from their employees’ salaries. For business owners and self-employed individuals, the responsibility lies in ensuring direct payment to the government. Furthermore, timely submission of professional tax returns ensures that the business or individual stays compliant with state tax filing requirements.

Example:

An employee who earns ₹15,000 per month is required to pay ₹500 as professional tax under Maharashtra tax compliance. The employer must deduct this amount from the salary and remit it to the state tax authorities.

Who Needs to Pay Professional Tax in Maharashtra?

In Maharashtra, professional tax applies to a wide range of individuals and businesses. Those who are liable to pay professional tax include:

1. Salaried Employees:
   • Any employee whose monthly salary is more than ₹7,500 is required to pay professional tax. Employers must ensure compliance by deducting and remitting the tax to the government.
   • Example: If an employee earns ₹12,000 per month, their professional tax will be ₹300 per month according to the Maharashtra tax compliance rules.
     
2. Self-Employed Professionals:
   • Freelancers, consultants, contractors, and other self-employed individuals must pay professional tax directly to the government.
   • Example: A consultant earning ₹15,000 per month must pay ₹500 as professional tax under the current Maharashtra tax compliance guidelines.
     
3. Business Owners and Traders:
   • All individuals running a business or trade, including owners of shops, factories, and commercial establishments, are required to pay professional tax.
   • Example: A business owner earning ₹25,000 a month needs to pay ₹500 in professional tax.
     
4. Corporations, Partnerships, and Limited Liability Companies (LLCs):
   • Corporations and LLCs are also responsible for professional tax payments based on the income they generate.

All these individuals and entities need to follow proper state tax filing processes to ensure the timely submission of professional tax returns.

Professional Tax Slabs in Maharashtra

The professional tax in Maharashtra slabs are structured according to the income of individuals and businesses. The rates differ for salaried employees, self-employed professionals, and business owners. The slabs vary in different cities and regions, but the general tax structure follows a uniform pattern.

Professional Tax Slabs for Salaried Employees

The professional tax for salaried employees is calculated based on their monthly salary:

• Income up to ₹7,500: ₹175 per month
• Income between ₹7,501 and ₹10,000: ₹300 per month
• Income above ₹10,000: ₹500 per month

Professional Tax Slabs for Self-Employed Professionals

Self-employed individuals such as doctors, lawyers, and consultants are required to pay professional tax based on their income level:

• Income up to ₹7,500: ₹175 per month
• Income between ₹7,501 and ₹10,000: ₹300 per month
• Income above ₹10,000: ₹500 per month

Example:

• A salaried employee earning ₹8,000 per month will need to pay ₹300 in professional tax.
• A freelancer earning ₹20,000 per month will need to pay ₹500 in professional tax.

This structure helps businesses and self-employed professionals understand their tax obligations under the Maharashtra tax compliance rules.

PTEC and PTRC Registration Process

For anyone liable to pay professional tax in Maharashtra, registration is a crucial step. There are two types of registrations to consider:

1. PTEC (Professional Tax Enrollment Certificate): This is required for self-employed individuals, freelancers, and business owners.
2. PTRC (Professional Tax Registration Certificate): Required for employers who deduct and remit professional tax on behalf of their employees.

PTEC Registration Process

The steps involved in registering for a PTEC are as follows:

1. Visit the Maharashtra GST Department portal and select PTEC registration.
2. Fill in the required business or professional details.
3. Upload documents like PAN cards, address proofs, and income details.
4. Submit the registration form and wait for verification.
5. Once approved, you will receive a PTEC certificate that can be used for state tax filing.

PTRC Registration Process

To register for PTRC, follow these steps:

1. Log in to the Maharashtra GST portal.
2. Choose PTRC registration and enter employer details, such as employee salary structure and tax liabilities.
3. Upload the necessary documents.
4. Submit the registration form and wait for approval.
5. Once approved, you will receive the PTRC certificate, which is essential for tax deductions and issuing a tax deduction certificate to employees.

How to Pay Professional Tax in Maharashtra

Once registered, individuals and businesses can proceed to pay their professional tax. Below is a step-by-step guide on how to do so:

1. Visit the Official Portal:
   • Go to the Maharashtra GST Department’s official website.
     
2. Log in to Your Account:
   • For self-employed professionals, log in using your PTEC credentials.
   • For employers, use your PTRC credentials.
     
3. Select the Payment Option:
   • Choose the appropriate payment option based on whether you are a self-employed individual or an employer.
     
4. Fill in Payment Details:
   • Enter tax period details, such as monthly, quarterly, or annual filing.
   • Provide your registration number and the amount of tax to be paid.
     
5. Choose Payment Mode:
   • Choose from payment modes like Net Banking, Debit/Credit Cards, NEFT/RTGS, or other available methods.
     
6. Complete the Payment:
   • Once payment details are filled, verify them and complete the transaction.
     
7. File the Professional Tax Return:
   • After payment, ensure that the professional tax return is filed within the due date to avoid penalties.
   • Employers must also issue a tax deduction certificate to employees to confirm that the professional tax has been deducted and paid.

Penalties for Non-Compliance

Failure to comply with professional tax Maharashtra regulations can result in severe penalties:

• Late Registration: ₹5 per day penalty for delayed registration.
• Delayed Payment: A 1.25% interest per month on any unpaid professional tax.
• Late Filing of Returns: ₹1,000 penalty per return for delayed submissions.
• Non-Deduction by Employers: Employers who fail to deduct and remit professional tax face a penalty of 10% of the unpaid tax amount.
• Failure to Issue Tax Deduction Certificate: Employers who do not issue this certificate face additional fines.

These penalties underline the importance of Maharashtra tax compliance and the need for timely filing of professional tax returns.

Common Mistakes to Avoid

1. Failing to Register for Professional Tax: This can lead to daily penalties of ₹5 for late registration.
2. Incorrect Professional Tax Filing: Submitting incorrect details in your return can lead to fines and delays in compliance.
3. Late Payment of Professional Tax: Not paying on time will incur penalties in the form of interest charges and fines.
4. Not Issuing Tax Deduction Certificates: Employers who fail to issue tax deduction certificates to employees may face additional fines.

Conclusion

Complying with professional tax in Maharashtra regulations is essential for ensuring smooth business operations and avoiding penalties. Whether you’re a salaried employee, a self-employed professional, or a business owner, understanding your responsibilities and adhering to Maharashtra tax compliance is crucial. The registration, payment, and return filing processes must be followed diligently to prevent legal issues and ensure your business or profession stays compliant.

Why Choose RegisterKaro? 

RegisterKaro provides comprehensive assistance for professional tax registration, filing returns, and compliance with all state tax regulations. We guide you through the entire process, ensuring that you stay compliant and avoid penalties. Contact Us Today for a hassle-free experience: Email: support@registerkaro.in
Call: +918447746183

Frequently Asked Questions (FAQs)

1. Who is liable to pay Professional Tax in Maharashtra?
   Salaried employees, self-employed professionals, and business owners earning above the prescribed threshold must pay professional tax.
   
2. How can I ensure Maharashtra tax compliance?
   Register for professional tax, deduct and pay taxes on time, and file returns as per the deadlines.
   
3. What are the Professional Tax slabs in Maharashtra?
   The tax slabs range from ₹175 to ₹500 depending on income.
   
4. How do I file a Professional Tax Return?
   Log into the Maharashtra GST portal, submit the necessary details, and file the return on time.
   
5. What is the penalty for late payment of Professional Tax?
   Late payment attracts a ₹1,000 fine and interest charges of 1.25% per month.
   
6. What is the difference between PTEC and PTRC?
   PTEC is for self-employed individuals, while PTRC is for employers who deduct and remit professional tax on behalf of employees.
   
7. How can I pay Professional Tax online?
   Pay online via Net Banking, Debit/Credit Cards, or NEFT/RTGS through the Maharashtra GST portal.
   
8. Is a Tax Deduction Certificate mandatory?
   Yes, employers must issue a certificate as proof of tax deduction to employees.
   
9. Can I claim a refund on Professional Tax?
   No, professional tax is non-refundable once paid.
   
10. What happens if I fail to register for Professional Tax?
    You will face penalties of ₹5 per day for late registration and other fines for non-compliance.