Profession Tax is a State level Tax in India on Professions, Trades, Callings and Employments.
The following Indian states levy Profession Tax – West Bengal, Karnataka, Maharashtra, Andhra Pradesh, Gujarat, Tamilnadu and Madhya Pradesh.
Profession Tax in Maharashtra
In Maharashtra (Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975), Profession Tax is applicable both on Individuals & Organizations (Company, Firm, Proprietary Concern, Hindu Undivided Family (HUF), Society, Club, Association Of Persons, Corporation or any other corporate body in Maharashtra per the provisions of the Maharashtra Professional Tax Act of 1975.
Profession Tax For Individuals in Maharashtra
Every person residing in Maharashtra engaged in any profession, trade, calling or employment is liable and has to obtain a Certificate of Enrolment from the Profession Tax Authority.
Once this certificate is obtained, the person can discharge their individual tax liability for five years by paying lumpsum amount equal to the amount of Profession Tax for four years in advance, getting relief for one year’s payment.
Exempted Individuals in Maharashtra
The following persons are exempted from the provisions of the Profession Tax Act in Maharashtra :
Senior Citizen above 65 years age.
Handicapped Person with more than 40 % disability or parent of a physically disabled or mentally retarded child.
Profession Tax For Organizations:-
An employer organization is required to get registered under the Profession Tax Act and obtain a Registration Certificateunder which the payment in respect of taxes deducted from employees salaries can be made.
Also as a firm, the organization is required to obtain Enrolment Certificate and pay Profession tax on it’s behalf.
New profession Tax Rates after Maharashtra Government Budget and Provisions
Periodicity of Returns
For employers holding Registration Certificate, the period of returns to be filed on basis of annual tax liability amounts are as follows :
- Annual Profession Tax Liability < Rs. 5000 - Annual Return.
- Annual Profession Tax Liability >= Rs. 5000 but < Rs. 20000 - Quarterly Returns.
- Annual Profession Tax Liability >= Rs. 20000 - Monthly Returns.
Returns are required to be filed on or before the last date of the month to which the return relates.
It should contain details of salaries paid and the amount of tax deducted in respect of the month immediately preceding the month to which the return relates.
Due dates for payment of Profession Tax and for filing the returns in Maharashtra:-
For the persons holding Enrolment Certificate - 30th June.
For any delay in the same, interest @ 1.25% per month will be charged.
Bank payment challans to be received by all Enrolment Certificate holders by mid June.
Profession Tax Penalties
- Delays in obtaining Enrolment or Registration Certificate – Penalty of Rs. 2/= (Rupees Two) per Day.
- Providing false information regarding enrolment – Penalty of 3 times tax amount.
- Non-payment of profession tax – Penalty equal to 10% of the amount of tax can be imposed.
Schedule of rates of tax on professions, trades, callings and employments after Budget:
Although new rates been passed in budget but they shall come into force on such date as the state Government may, by notification in the Official Gazette, appoint. ((Government of Maharashtra appointed the 1st July 2009 to be the date from which new profession rates will come into force)
|Sr. No.||Class of Persons||Rate of Tax|
|1.||Salary and wage earners. Such persons whose monthly salaries or wages,|
|(a) exceed rupees 5,000 but do not exceed rupees 10,000||175 per month|
|(b) exceed rupees 10,000||2500 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 ofFebruary|
|2.||(a) Legal Practitioners including Solicitor and Notaries;||2500 per annum|
|(b) Medical Practitioners, including Medical Consultants and Dentists;||2500 per annum|
|(c) Technical and Professional Consultants, including Architects,Engineers, R.C.C. Consultants, Tax Consultants, Chartered Accountants, Actuaries and Management Consultants;||2500 per annum|
|(d)Chief Agents, Principal Agents, Insurance Agents and Surveyors and Loss Assessors registered or licensed under the Insurance Act, 1938, U.T.I. Agents under U.T.I. Scheme, N.S.S. agents under postal Scheme;||2500 per annum|
|(e)Commission Agents, Dalals and Brokers (other than estate brokers covered by any other entry elsewhere in this Schedule);||2500 per annum|
|(f)All types of Contractors (other than building contractors covered by any other entry elsewhere in this Schedule); and||2500 per annum|
|(g)Diamond dressers and diamond polishers; having not less than one year’s standing in the profession.||2500 per annum|
|3.||(a) Members of Association recognised under the Forward Contracts (Regulations) Act, 1952||2500 per annum|
|(b) (i) Member of Stock Exchanges recognised under the Security Contracts (Regulation) Act, 1956;||2500 per annum|
|(b) (ii) Remisiers recognised by the Stock Exchange;||2500 per annum|
|4.||(a) Building Contractors;||2500 per annum|
|(b) Estate Agents, Brokers or Plumbers, having not less than one year’s standing in the profession.||2500 per annum|
|5.||Directors (other than those nominated by Government) of Companies registered under the Companies Act, 1956, and Banking Companies as defined in the Banking Regulation Act, 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.||2500 per annum|
|6.||(a) Bookmakers and Trainers licensed by the Royal Western India Turf Club Limited;||2500 per annum|
|(b) Jockeys licensed by the said Club||2500 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, Play-back Singers, Cameramen, Recordist, Editors and Still-Photographers,||2500 per annum|
|(b) Junior Artists, Production Managers, Assistant Directors, Assistant Recordists, Assistant Editors and Dancers.||1000 per annum|
|8.||Dealers registered under the Maharashtra Value Added Tax Act, 2002, or Dealers registered only under the Central Sales Tax Act, 1956, whose annual turnover of sales or purchases,-|
|(i) is rupees 25 lakh or less||2000 per annum|
|(ii) exceeds rupees 25 lakh||2500 per annum|
|9.||Occupiers of Factories as defined in the Factories Act, 1948, who are not covered by entry 8 above||2500 per annum|
|10.||(1)(A) Employers of establishments as defined in the Bombay Shops and Establishment 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||1000 per annum|
|(b) where not exceeding two employees are employed||2000 per annum|
|(c) where more than two employees are employed||2500 per annum|
|(B) Employers of establishments as defined in the Bombay Shops and Establishments Act, 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,||1000 per annum|
|(c) where more than two employees are employed||2500 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;||1000 per annum|
|(3) Conductors of Video or Audio Parlours, Video or Audio Cassette Libraries, Video Game Parlours;||2500 per annum|
|(4) Cable Operators, Film Distributors;||2500 per annum|
|(5) Persons owning / running marriage halls, conference halls, beauty parlours, health centres, pool parlours;||2500 per annum|
|(6) Persons running / conducting coaching classes of all types||2500 per annum|
|11.||Owners or Lessees of Petrol / Diesel / Oil Pumps and Service Stations / Garages and Workshops of Automobiles||2500 per annum|
|12.||Licensed Foreign Liquor Vendors and employers of Residential Hotels and Theatres as defined in the Bombay Shops and Establishments Act, 1948.||2500 per annum|
|13.||Holders of permits for Transport Vehicles granted under the Motor Vehicles Act, 1988, which are used or adopted to be used for hire or reward, where any such person holds 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||1000 per annum|
|(c) (i) goods vehicles other than those covered by (a)||1500 per annum|
|(c) (ii) trucks or buses||1500 per annum|
|for each such vehicle :Provided that the total tax payable by a holder under this entry shall not exceed rupees 2,500 per annum.|
|14.||Money lenders licensed under the Bombay Money-lender Act, 1946||2500 per annum|
|15.||Individuals or Institutions conducting Chit-Funds||2500 per annum|
|16.||Co-operative Societies registered or deemed to be registered under the Maharashtra Co-operative Societies Act, 1960 and engaged in any profession, trade or calling –|
|(i) State level Societies||2500 per annum|
|(ii) Co-operative sugar factories and spinning Mills||2500 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.||2500 per annum|
|18.||Companies registered under the Companies Act, 1956 and engaged in any profession, trade or calling.||2500 per annum|
|19.||Each Partner of a firm (whether registered or not under the Indian Partnership Act, 1932) engaged in any profession, trade, or calling.||2500 per annum|
|20.||Each Co-parcener (not being a minor) of a Hindu Undivided Family, which is engaged in any profession, trade or calling.||2500 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 anotification is issued under the second proviso to sub-section (2) of section 3||2500 per annum|
Notwithstanding anything contained in this Schedule, where a person is covered by more than one entry of this Schedule, the highest rate of tax specified under any of those entries shall be applicable in his case. This provision shall not be applicable to entry 16(iv) of the schedule.
For the purposes of Entry 8 of the Schedule, the Profession Tax shall be calculated on the basis of the “turnover of sales or purchases” of the previous year. If there is no previous year for such dealer, the rate of Profession Tax shall be Rs. 2000. The expressions “turnover of sales” or “turnover of purchases” shall have the same meaning as assigned to them, respectively, under the Maharashtra Value Added Tax Act, 2002. ”