Every citizen who earns his living by working in any form must pay the occupation tax imposed by the state government. In short, every earning person has to pay this tax. Billing and amount collected may vary from state to state, but 2,500 rupees is the maximum per year. The tax is not imposed only on professionals. The tax is based on income received from a profession, profession, or job. Employers, freelancers, professionals, etc. are required to pay this tax if their income exceeds a certain limit, if any. This blog discusses Professional Tax in Maharashtra.
In the Income Tax Act, of 1961, professional tax is a deductible amount and can be deducted from taxable income.
According to Article 246 of the Constitution of India, laws relating to the Union List, including income tax, can only be passed by Parliament. States can only enact concurrent and state-list laws.
Professional Tax (PT) in India
In India, several state governments levy a professional tax. People working in various professions pay taxes on their income. Under Article 276 (2) of the Constitution of India, the Government of India in 1949 authorized the states to collect a professional tax. Occupation tax is very similar to income tax. There is one difference between the two: the state government levies professional tax while the state levies income tax. Initially, when it was launched, Rs. 250 was considered a professional fee. In 1998, the amount was increased to Rs. 2500. The state government sought to increase the professional tax from Rs. 2500 to 7000 Rs in recent years. However, the Government of India has not reduced the amount so far and its maximum amount remains the same.
Professional taxes – who collects them?
Employers collect professional tax from the monthly salary.
After collecting the professional tax, employers pay the state. Otherwise, they could be fined if they don’t accept them or don’t pay. If you do not work for someone else,
you must pay professional tax. Professionals without an employer can register by filling out an application. The person gets the registration number after receiving the form. The invitation fee can be paid in banks with registration number. In addition, certain states also offer tax incentives to professionals who pay their taxes in lump sum for several years at a time. so it’s worth checking your state’s tax laws.
Applicability of Professional Tax (PT)
- Companies
- Firms
- Surveyors
- Tax consultants
- Management consultants
- Medical representatives such as doctors, medical consultants, and dentists
- LLPs
- Contractors
- Architects
- Engineers
- Insurance agents
- Corporation Societies
- HUF Associations
- Clubs
- Legal practitioners
such as solicitors Chartered Accountants CS Professional tax rate The profession tax charged by the state government varies from state to state. Each state has its own laws and regulations that govern taxation in that state. But all states follow an income-based slab system for collecting profession tax.
The provision of Article 276 of the Constitution allows a maximum of 2500 rubles for the professional tax, which cannot be exceeded.
Why does the professional tax vary from state to state?
Since it is a tax imposed by the state, it varies from state to state. Calling tax is deducted according to the plates reported by each state. Also, some states or federal states may not charge a business tax. It is usually paid in 12 equal monthly installments, except that the February installment is larger than the others.
In some cases, income sources belonging to different economic sectors may also be taxed. For example, a person running a transport business may pay professional tax of approximately Rs 50 per month per vehicle and the maximum tax amount may be Rs. 1000 per year in other states.
Professional tax in Maharashtra
The following are the Professional and Self Employed Taxes in Maharashtra:-
- Gross monthly salary payable as professional fee Up to Rs.7500 Nil Rs. 7,501 to Rs.10,000.
- 175 per month over Rs. 10000 Rs 2500 per year You can pay as follows: Up to Rs.7500 Nil Rs. 7,501 to Rs.10,000 Rs. 175 per month.
Above Rs. 10,000 Rs. 2500 per year You can pay the amount in the following ways:-
In addition, the Maharashtra state government has provided special benefits to women professionals. The provision says that women workers earning up to Rs 10,000 per month will not have to pay professional tax (p-tax) on their salary. That exemption was introduced in the 2015-2016 fiscal year.
Maharashtra Professional Tax Penalty
Maharashtra will require a fine under the following circumstances: Delay in professional tax registration and Incorrect data when registering professional tax.
Professional tax payment after the deadline The persons listed below do not have to pay the professional tax: Those who run educational institutions that teach students up to 12th standard.
Those serving in the Central Paramilitary Forces (CPMF). A person who has undergone a sterilization operation and has one child. All relevant documents must be submitted.
- Any ex-serviceman belonging to Schedule I (SI No. 1).
- A person with a disability of at least 40 percent.
- A certificate must be sent for this.
- Owners of one tricycle or taxi with a goods transport permit.
- Persons who are deaf, dumb, or blind and earn wages
Armed forces include civilians, including both combatants and non-combatants. However, martial law must apply to the armed forces. Foreign technicians employed by the state. Hospitals provide charity and welfare care in areas below the landed property level.
How is the professional tax collected and paid?
The department responsible for tax collection The Commercial Tax Department collects professional tax. The revenue department of both the states collects it which later goes to the Municipal Corporation fund. Specialists are responsible for paying taxes The person who employs the employee is responsible for deducting, paying, and remitting the professional tax to the state government in accordance with the state laws that prescribe the financial limit.
A person who is also an occupation/profession or employee (firm, partnership, self-employed, etc.) is required to pay business tax for that occupation if state laws provide a financial limit. In order to deduct tax from its employees and pay tax, such an employer must obtain a certificate of professional tax liability and a certificate of registration of professional tax liability.
future general Those who run an independent business without employees must also register unless state law sets a financial threshold. However, exemptions granted by the state to certain categories are valid for the payment of the professional tax.
For example,
Parents and guardians of mentally challenged and blind persons are exempted from professional tax in Karnataka.
Is it possible to get a professional tax exemption?
You may be able to get a tax exemption for relocation allowances you receive from your employer (whether you’re moving from one state to another or from one city in one state to another). Relocation allowances are taxed on wage income if they are paid by the employer. According to the Income Tax Act, only movers and packers are exempt from income tax, as well as train/air tickets for relocation of family members and hotel accommodation for a maximum of 15 days.
In order to receive a tax exemption when moving to a new location, the employee must keep all documents related to benefits and payments made during the transfer, as well as evidence of payments made. In addition, the employer must record these expenses in his accounting under business expenses. The difference between the actual costs and the moving allowance paid by the employer is taxable.
Conclusion Professional Tax in Maharashtra
Professional tax in Maharashtra is a significant part of income generation for the state. The two managers and representatives ought to know about their obligations, registration, tax deduction, and timely filing. This guide is a valuable resource for the people who need to comprehend and explore the complexities of Professional Taxis in Maharashtra and ensure smooth and legal financial operations for individuals and businesses in the state. Taxes are a significant source of revenue for the government which facilitates the provision of essential services and infrastructure. In the Indian territory of Maharashtra, one such tax that assumes a significant part in the state’s economy is the professional tax. Professions, Occupations, Professions, and Employment Act, 1975, is levied on individuals and entities engaged in various professions, occupations, or work.
This blog is written by Aditi Dixit.
