Maharashtra PROFESSION TAX ACT

Scope

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

Persons earning salary or wages are also covered. Employers are required to deduct PT, at rates prescribed, from salary/wages and to pay 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/more entries other than entry 1 in Sch. 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.

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 @ Rs. 5 (registration)/Rs. 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.

Returns

Every registered employer shall furnish a return in Form III-B (electronic return). Non filing of return, in time, may attract penalty. The payment of tax, if any, should be made in Challan Form No. MTR-6, before uploading the return.

Due Dates

a)

If tax liability during the previous year or part thereof less than Rs. 50,000.

Annual Return on or before 31st March of the year (for salary paid for the period 1st March to 28th February)

b)

Tax liability Rs. 50,000 or more

Monthly Returns on or before the last day of the month (covering salary paid for the preceding month)

At present, it is mandatory to file e-return for all those employers who are required to file monthly return of Profession Tax. The others may, at their option, file e-return. The Trade Circular No. 4T dated 19th March 2011 provides for a grace period of 10 days for uploading e-return provided that the payment of tax due has been made within the due date.

Payment of Taxes

Every registered employer shall pay tax before filing the return as per due dates.

Every enrolled person shall pay the tax within one month from the date of enrolment in the first year, thereafter by 30th June of every year.

Lump Sum Payment (Composition Scheme)

Enrolled person/s can avail the benefit of above scheme, as provided u/s. 8(3) of the Act. Accordingly one can discharge his liability for five years by making advance payment, of an amount equal to four times of annual tax liability, on or before 30th June of the year. If the amount is not paid by 30th June it can still be paid before 31st March, by paying an additional lump sum amount calculated @ Rs. 200 p.m. (w.e.f. 1-4-2000) for the period of delay. Any increase or decrease in the rate of tax within the aforesaid period of five years shall not vary the tax liability of such person.

Interest and Penalty for Non-Payment of Tax

If an enrolled person/registered employer fails to pay the tax in time he shall be liable to pay simple interest @ 1.25% of the tax payable for each month for which the tax remains unpaid. The Commissioner is empowered to reduce/waive this interest in respect of any period, after recording reasons.

Further if the enrolled person/registered employer fails without reasonable cause, to make payment of any tax within the required time the prescribed authority may, after a reasonable opportunity of hearing, impose a penalty equal to 10% of the tax due.

Exemption

Section 27A exempts following classes of persons from tax:

members of armed forces of Union serving in the State;

the badli workers in the textile industry;

any person suffering from a permanent physical disability (including blindness) specified in the rules, certified by a physician, a surgeon or an oculist, working in a Government hospital, which has the effect of reducing considerably such individual’s capacity for normal working or engaging in a gainful employment or occupation and also his parents or guardians;

women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana of Directorate of Small Savings;

parents or guardians of any person suffering from mental retardation specified in the rules, certified by a psychiatrist working in a Government hospital;

persons having completed age of 65 years (w.e.f. 1-4-1995);

parents or guardians of a child suffering from a physical disability mentioned in (3) above;

partnership firms and HUFs.

Rates of Profession Tax

Rates of tax are prescribed under Schedule I of the Act containing entries 1 to 21 for different classes of persons.

Rates of tax (w.e.f. 1-7-2009) (as per Schedule I)

Schedule of rates of tax on professions, trades, callings and employments

Schedule of rates of tax on professions, trades, callings and employments

Sl. No.

Class of Persons

Rate of tax Rs.

(1)

(2)

(3)

1

Salary and wage earners — Such persons whose monthly salaries or wages,—

(a)

do not exceed rupees 5,000

Nil

(b)

exceeds rupees 5,000 but do not exceed rupees 10,000;

175 per month

(c)

exceeds rupees 10,000

2,500 per annum,to be paid in the
following manner:

a.

rupees two hundred per
month except for the month
of February;

b.

rupees three hundred
for the month of February

2

(a)

Legal Practitioners including Solicitor and Notaries;

(b)

Medical Practitioners including Medical Consultants and Dentists;

(c)

Technical and Professional Consultants, including Architects, Engineers, R.C.C. Consultants, Tax Consultants, Chartered Accountants, Actuaries and Management Consultants;

(d)

Chief Agents, Principal Agents, Insurance Agents and Surveyors and Loss Assessors registered or licenced under the Insurance Act, 1938, (4 of 1938) U.T.I. Agents under
U.T.I. Scheme, N.S.S. Agents under postal scheme;

2,500 per annum

(e)

Commission Agents, Dalals and Brokers (other than estate brokers covered by any other entry elsewhere in this Schedule);

(f)

All types of Contractors (other than building contractors covered by any other entry elsewhere in this Schedule); and

(g)

Diamond dressers and diamond polishers, having not less than one year’s standing in the profession.

3

(a)

Members of Association recognised under the Forward Contracts (Regulation) Act, 1952; (74 of 1952)

2,500 per annum

(b)

(i)

Member of Stock Exchanges recognised under the Security Contracts (Regulation) Act, 1956; (42 of 1956)

2,500 per annum

(ii)

Remisiers recognised by the Stock Exchange

2,500 per annum

4

(a)

Building Contractors

2,500 per annum

(b)

Estate Agents, Brokers or Plumbers, having not less than one year’s standing in the profession

2,500 per annum

5

Directors (other than those nominated by Government) of Companies registered under the Companies Act, 1956, (1 of 1956) and Banking Companies as defined in the Banking Regulation Act, 1949 (10 of 1949) Explanation.— The term 'Directors’ for the purpose of this entry will not include the persons who are Directors of the companies whose registered offices are situated outside the State of Maharashtra and who are not residing in the State of Maharashtra.

2,500 per annum

6

(a)

Bookmakers and Trainers licenced by the Royal Western India Turf Club Limited;

2,500 per annum

(b)

Jockeys licenced by the said Club.

2,500 per annum

7

Self-employed persons in the Motion Picture Industry, Theatre, Orchestra, Television Modelling or Advertising Industries as follows:—

(a)

Writers, Lyricists, Directors, Actors and Actresses (excluding Junior Artists), Musicians, Playback Singers, Cameramen, Recordists, Editors and Still-Photographers;

2,500 per annum

(b)

Junior Artists, Production Managers, Assistant Directors, Assistant Recordists, Assistant Editors and Dancers.

1,000 per annum

8

Dealers registered under the Maharashtra Value Added Tax Act, 2002, (Mah. IX of 2005) or Dealers registered only under the Central Sales Tax Act, 1956, (74 of 1956) whose annual turnover of sales or purchases of previous year,—

(i)

is rupees 25 lakh or less

2,000 per annum

(ii)

exceeds rupees 25 lakh

2,500 per annum

9

Occupiers of Factories as defined in the Factories Act, 1948, (63 of 1948) who are not covered by entry 8 above.

2,500 per annum

10

(1)

(A)

Employers of establishments as defined in the Bombay Shops and Establishments Act, 1948, where their establishments are situated within an area to which the aforesaid Act applies, and
who are not covered by entry 8—Such employers of establishments,—

(a)

where no employee is employed

1,000 per annum

(b)

where not exceeding two employees are employed;

2,000 per annum

(c)

where more than two employees are employed.

2,500 per annum

(B)

Employers of establishments as defined in the Bombay Shops and Establish- ments Act, 1948, (Bom. LXXIX of 1948) where their establishments are not situated within an area to which the aforesaid Act applies, and who are not covered by entry 8.
Such employers of establishment, —

(a)

where no employee is employed;

500 per annum

(b)

where not exceeding two employees are employed;

1,000 per annum

(c)

where more than two employees are employed

2,500 per annum

(2)

Persons owning/running STD/ISD booths or Cyber Cafes, other than those owned or run by Government or by physically handicapped persons;

1,000 per annum

(3)

Conductors of Video or Audio Parlours, Video or Audio Cassette Libraries, Video Game Parlours;

2,500 per annum

(4)

Cable Operators, Film Distributors

2,500 per annum

(5)

Persons owning/running marriage halls, conference halls, beauty parlours, health centres, pool parlours;

2,500 per annum

(6)

Persons running/conducting coaching classes of all types.

2,500 per annum

11

Owners or Lessees of Petrol/Diesel/Oil Pumps and Service Stations/Garages and Workshops of Automobiles.

2,500 per annum

12

Licenced Foreign Liquor Vendors and employers of Residential Hotels and Theatres as defined in the Bombay Shops and Establishments Act, 1948. (Bom. LXXIX of 1948).

2,500 per annum

13

Holders of permits for Transport Vehicles granted under the Motor Vehicles Act, 1988, (59 of 1988) which are used or adopted to be used for hire or reward, where any such personholds permit or permits for,—

a

three wheeler goods vehicles, for each such vehicle;

750 per annum

b

any taxi, passenger car, for each such vehicle;

1,000 per annum

c

(i)

goods vehicles other than those covered by (a);

1,500 per annum

(ii)

trucks or buses for each such vehicle :

1,500 per annum

Provided that the total tax payable by a holder under this entry shall not exceed rupees 2,500 per annum.

14

Money-lenders licenced under the Bombay Money-lenders Act, 1946 (Bom. XXXI of 1947)

2,500 per annum

15

Individuals or Institutions conducting Chit Funds.

2,500 per annum

16

Co-operative Societies registered or deemed to be registered under the Maharashtra Co-operative Societies Act, 1960 (Mah. XXIV of 1961) and engaged in any profession, trade or calling,—

(i)

State level Societies;

2,500 per annum

(ii)

Co-operative Sugar Factories and Spinning Mills;

2,500 per annum

(iii)

District Level Societies;

750 per annum

(iv)

Handloom Weavers Co-operative Societies;

500 per annum

(v)

All other Co-operative Societies not covered by clauses (i), (ii), (iii) and (iv) above

750 per annum

17

Banking Companies, as defined in the Banking Regulation Act, 1949. (10 of 1949)

2,500 per annum

18

Companies registered under the Companies Act, 1956 (1 of 1956) and engaged in any profession, trade or calling.

2,500 per annum

19

Each partner of a firm (whether registered or not under the Indian Partnership Act, 1932) (9 of 1932) engaged in any profession, trade or calling.

2,500 per annum

20

Each Coparcener (not being a minor) of a Hindu Undivided Family, which is engaged in any profession, trade or calling.

2,500 per annum

21

Persons other than those mentioned in any of the preceding entries who are engaged in any profession, trade, calling or employment and in respect of whom a notification is issued under the second proviso to sub-section (2) of section 3.

2,500 per annum

Persons covered by more than one entry

At the highest rate of tax specified under any of those entries shall be applicable. [Except for entry 16(iv)]

It may also be noted that :

— Professionals retired from their profession but continuing on the list of any council, association, etc., are not liable for enrolment (Cir. No. 99 dt. 30-3-1981 and No. 5 dt. 12-4-1989)

— If L.I.C. agent gets commission, only on past business, he is not liable for enrolment or to pay Profession Tax (Dwarka Pardiwala : R.A. No. 47 of 1979 dt. 13-3-1980).