Concept of Professional Tax i.e. PTEC & PTRC ? Details of Professional Tax in Maharashtra

March 20, 2019 by Team Instabizfilings

History:

Professional Tax was introduced in the year 1949. Professional Tax happens to be a source of revenue for the State Government.

PTRC and PTEC under professional tax. The PTRC and PTEC are different certificates that are required by a business entity operating in India.

PTEC: Professional tax Enrolment certificate.

PTEC permits to pay professional tax of business entity (i.e Private Limited company, Public limited company, Limited liability partnership) and also owner or professional (such as Partner, Director or Proprietor)

PTRC: Professional tax Registration certificate.

PTRC is to permit the employer (government or non-government) to deduct professional tax from the employee’s salary or wages and deposit the same to the respective state government. A fully functional business entity commonly requires both to conduct its business operations. Registration

Obtaining a PTEC registration is mandatory within 30 days from the date of incorporation or start of the business or practice. Income tax act, allows deduction of Professional tax paid to state government.

PTEC Applicability and class of person

1. Legal Practitioners including Solicitor and Notaries; 2. Medical Practitioner including Medical Consultants and Dentists; 3. Technical and Professional Consultants, including Architects, Engineers, R.C.C. Consultants, Tax Consultants, Chartered Accountants, Actuaries and Management Consultants; 4. Chief Agents, Principal Agents, Insurance Agents and Surveyors and Loss Assessors registered or licensed under the Insurance Act 1938, I.T.I. Agents under U.T.I. Scheme, N.S.S. Agents under Postal Scheme; Commission Agents, Dalals and Brokers (other than estate brokers covered by any other entry elsewhere in this Schedule) 5. All types of Contractors (other than building contractors covered by any other entry elsewhere in this Schedule); and 6. Diamond dressers and diamond polishers, having not less than one year's standing in the profession.	2500 per annum
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 person 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.	Rs.2500 per annum
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-i.is Rupees 25 lakh or less Exceeds rupees 25 lakh	Rs. 2000 per annum Rs 2500 per annum
Companies registered under the Companies Act, 2013 and engaged in any profession, trade or calling.	Rs.2500 per annum
Each Partner of a firm (whether registered or not under the Indian Partnership Act, 1932) engaged in any profession, trade or calling.	Rs.2500 per annum
Each Co-parcener (not being a minor) of a Hindu Undivided Family, which is engaged in any profession, trade or calling.	Rs.2500 per annum
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.	Rs.2500 per annum

Rates and schedule of Professional tax - click here

Due Date for Payment of PTEC:

1. In respect of Persons enrolled on or before the 31st May: Tax is to be paid before 30th June.
2. In respect of Persons enrolled after 31st May: Tax is to be paid within one month of the date of enrollment.

Interest Rate:

An interest of 1.25% pm shall be levied on delayed payments of Professional Tax.

Penalties:

A penalty of 10% shall be levied on the amount owed in case of delayed payment. Delay in obtaining the PTEC Certificate will be charged at Rs.2 per day.

Exemptions:
Following classes of persons are exempt from payment of professional tax:
1. Persons having completed the age of 65 years (w.e.f. 1-4-1995);
2. Partnership firms and HUFs (but each partner of a partnership firm and each coparcener of HUF are liable for enrollment, see Entries 19 & 20 in Schedule 1). Lump Sum Payment Scheme for PTEC Holder Persons:
There is a lump sum payment scheme for enrolled persons. The individual who pays Rs. 2,500 annually has an option to pay Rs. 10,000/- for five years.