Maharashtra Professional Tax – The Exclusive Guide of 2024

Maharashtra is one of the states in India that generally imposes Professional Tax (PT) on the income of an individual based on employment, business, or profession. 

This blog post is an all-inclusive analysis of Maharashtra Professional Tax including history, applicability, rates, filing process, and exemptions. 

It will help an employer, employee, or professional posted in this state to know how Professional Tax works in Maharashtra.

What is Maharashtra Professional Tax?

Professional tax is a type of tax that the state governments of India collect from their citizens who earn income through salary, profession, or business. 

It is collected based on the income slab and varies from state to state. The Maharashtra State Profession, Trade, Occupation, and Employment Tax Act, 1975 governs professional tax in the state of Maharashtra. 

Under this Act, the employer is liable to deduct PT from the salary and remit it to the Maharashtra government.

What is the Purpose of Maharashtra Professional Tax?

Maharashtra Professional tax is one of the primary sources of income for state governments, which is collected mainly for welfare schemes and government services. Even though the collection is not huge compared to other taxes, it is one of the many contributions to the finances of states.

What is the Maharashtra Professional Tax Act?

The Maharashtra State Profession, Trade, Occupation and Employment Tax Act, 1975, popularly known as the Maharashtra Professional Tax Act, governs the collection of professional tax in the state of Maharashtra. 

The said tax is levied on individuals and other organizations that carry on business, trade, profession, and employment. The amount collected under the aforesaid Act forms part of the revenue of the Maharashtra State Government.

Who is Liable to Pay Maharashtra Professional Tax?

In Maharashtra, the responsibility of paying Maharashtra professional tax is for both salaried employees and self-employed individuals. Employers are responsible for deducting the tax from the salaries of employees, while self-employed professionals must pay it themselves.

Salaried Employees

For salaried individuals, employers are responsible for deducting Maharashtra professional tax from the employee’s salary and remitting it to the government. This deduction is made based on the monthly salary, and the amount varies according to the specific income slab set by the government.

Self-Employed Individuals

Self-employed individuals such as doctors, lawyers, chartered accountants, architects, consultants, and freelancers are required to register themselves with the Maharashtra Professional Tax Department and pay taxes directly. Tax liability arises when the income exceeds a certain limit as per the prescribed slabs.

Employers’ Responsibility

Employers play a vital role in ensuring compliance with Maharashtra professional tax regulations. They must deduct the appropriate amount of tax from their employee’s salaries and deposit it with the government. Failure to do so may result in a penalty.

What is The Eligibility Criteria for Paying Professional Tax in Maharashtra?

Eligibility to pay Maharashtra Professional Tax depends on the type of income and employment.

• Salaried Employees: Any employee who receives a salary of more than ₹7,500 per month must pay Professional Tax. The employer deducts the amount from the salary.
• Self-employed Individuals: Doctors, lawyers, chartered accountants, freelancers, and consultants who earn more than ₹1,20,000 per year must pay Maharashtra Professional Tax.
• Businesses and Traders: Businesses registered in the state of Maharashtra that employ employees pay Professional Tax on behalf of the employees as well as on their own account.
• Exempted Categories: Certain categories of people, such as people above the age of 65, people with disabilities, and even people with income below the minimum threshold are exempted from paying Professional Tax.

What are the Exemptions from Professional Tax?

Certain individuals are exempted from paying Maharashtra Professional Tax based on their occupation, income, or physical condition.

Exempt Categories

• Senior citizens aged 65 years or above.
• Parents or guardians of children with mental disabilities.
• Disabled individuals with at least 40% disability.
• Women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana.
• Individuals earning a monthly salary of less than ₹7,500.

These exemptions provide relief to specific segments of the population who may not be able to bear the burden of Maharashtra Professional Tax.

What is the Maharashtra Professional Tax Calculation?

Maharashtra Professional tax is collected as per the income slab. This is as per the Maharashtra State Business, Trade, Profession, and Employment Act. The amount is different for salaried employees and self-employed individuals.

For salaried employees, it is calculated per month against the salary received. Employers deduct the applicable tax in the respective slab and hand it over to the state government. 

For self-employed people, it is normally calculated at the rate of ₹2,500 per year for those earning more than ₹10,000 monthly.

What is the Registration for Professional Tax?

Individuals and self-employed persons working or residing in the state of Maharashtra must pay their Maharashtra professional tax. For companies, the method is slightly different from the one used for individuals.

For Employers

For employers, professional tax registration under Maharashtra must be completed within 30 days of hiring employees. Registration can be done in both ways (offline and online by logging in to the Maharashtra Goods and Services Tax Portal. Employers who hire employees must register under two categories;

• Professional Tax Registration Certificate (PTRC) for deducting tax from employees.
• Professional Tax Enrollment Certificate (PTEC) for paying tax on behalf of the organization.

For Self-Employed Individuals

Even individuals who are self-employed must enroll under PTEC. The process of enrolling under PTEC is very easy and can be done online. Once enrolled successfully, the taxpayer will get a unique enrollment number. This enrollment number will be used for all communications with regard and a means to make payments.

What are the Tax Rates and Slabs of Maharashtra Professional Tax?

Here is a table outlining the professional tax rates and slabs applicable in Maharashtra:

Key Points:

• For women: Women employees are exempted up to INR 7,500 salary.
• Men: Income below Rs. 10,000 are exempt.
• February Exception: Tax for earning above INR 15,000 is INR 200 a month except in February when it is INR 300.

What is the Filing and Payment of Professional Tax?

Paying and filing Maharashtra professional tax can be done online or offline. This tax on businesses in the state of Maharashtra offers e-payment options, which will make it relatively hassle-free.

Filing Due Dates for Employers

Filing and paying Maharashtra professional tax returns must be done every month by employers. The due dates for filing professional tax returns depend on the number of employees.

• Employers with less than 20 employees must file annually. The filing will be done annually, and it is due on the last day of March of the following year.
• Filing returns for employers with 20 or more employees will be monthly. The return must be submitted by the last day of the month for which the tax was deducted.

Payment Procedure for Self-Employed

Self-assessment of a self-employed person has to pay annually by March 31 every year. The payment can be made using the internet portal through net banking debit card or any other electronic facility.

How to Pay Maharashtra Professional Tax Payment?

You can pay Maharashtra Professional Tax either online or offline. Below are the steps for both methods:

Online Payment of Maharashtra Professional Tax

Visit the Official Website:

• Go to the Maharashtra Goods and Services Tax (GST) Department’s official website: https://mahagst.gov.in.

Login/Register:

• If you are already registered, log in with your credentials (User ID and Password).
• You must specify whether you are an employer or self-employed and follow the appropriate registration process.

Navigate to the Professional Tax Section:

• Once logged in look for the ‘e-Payment’ option under Maharashtra professional tax.

Enter Details:

• Enter your Maharashtra Professional Tax Registration Number, the period for which you seek to pay, and the amount payable.

Choose Payment Mode:

• Select the desired mode of payment: Be it Net Banking, Credit/Debit Card, UPI, etc.
• Verify the payment details.

Submit and Confirm Payment:

• After the payment, download or save the ack receipt for any future reference. It is proof of payment.

Offline Payment of Maharashtra Professional Tax

Collect Challan Form:

• Visit the nearest Maharashtra State Commercial Taxes Office or one of the branches of a bank for the collection of the Professional Tax Payment Challan.

Fill in the Challan:

• PTRC or PTEC, tax period, and amount paid should be filled in the challan form.

Submit the Challan and Payment:

• The filled-up challan along with cash, cheque, or demand draft should be presented to the professional tax-paying bank branch.

Receive Receipt:

• Once the payment is made, the bank will issue a receipt. The same receipt be taken as proof of the payment.

What are the Penalties for Non-Compliance?

Non-compliance with Maharashtra tax professional regulations can lead to penalties for employers and individuals. The penalties stated include fines, interest on late payment, and even prosecution in extreme cases.

For Late Registration

If an employer or individual fails to register within the stipulated time, a penalty of ₹5 per day is payable till the date of registration.

For Late Payment

Professional tax-due accounts accrue interest of 1.25% per month on the past-due amount. In addition, a penalty of 10% on the tax due may be levied.

For Late Filing of Returns

Non-filing or delayed filing of returns attracts a penalty of ₹1,000 for each late filing of return.

What are the Documents Required for Registration and Filing?

To register for and file Professional Tax in Maharashtra, certain documents are required. These may vary slightly based on the type of entity (employer or individual) and the nature of the profession.

For Employers

• PAN card of the employer.
• Certificate of Incorporation (for companies).
• Address proof (electricity bill, lease agreement, etc.).
• Details of employees, including salary structure.

For Self-Employed Individuals

• PAN card.
• Proof of profession or trade (degree, registration, etc.).
• Address proof.

How Do You Register for Professional Tax in Maharashtra?

Both employers and self-employed professionals should go for Professional Tax in Maharashtra. Applications by employers are made under the Professional Tax Registration Certificate (PTRC), whereas self-employed professionals have to enroll themselves under the Professional Tax Enrollment Certificate (PTEC). Here’s how to do it step-wise:-

• Visit the Official Website: First of all visit the official website of the MGST department in Maharashtra.
• Choose the registration type: Depending on whether you are an employer or self-employed, you will select PTRC if you are an employer and PTEC if you are a self-employed professional.
• Fill out the application properly: Fill in all the details which include personal details, PAN card, business details, and other required documents.
• Submit documents: You upload relevant documents like a PAN card, address proof, and identity proof.
• Verification and approval: On submission of your application, the concerned department verifies the details and after approval, gives the registration certificate.

What is the Maharashtra Professional Tax Payment Due Date?

The Professional Tax slab rates in Maharashtra are based on monthly salary or income. Here’s an overview:

For Employers:

• Income up to ₹7,500: Nil
• Income between ₹7,501 and ₹10,000: ₹175 per month
• Income above ₹10,000: ₹200 per month (except for February, which is ₹300)

For Self-Employed Individuals: 

• ₹2,500 per annum

The slab rates are revised periodically, and the government may adjust them depending on inflation and other economic factors.

What is the Maharashtra Professional Tax Late Payment Penalty?

Penal provisions against non-compliance of professional tax laws include:

• Delay in registration: A penalty of ₹5 per day will be charged for delay in registration.
• Late payment: 1.25% per month on the outstanding amount.
• Delay in return: A penalty of ₹1,000 will be charged if the return is not filed within the due date.
• General penalty: A penalty of 10 percent of the tax payable for default in payment.

This also helps in meeting the deadlines so that an additional financial burden of penalty is not added to them.

Who is Responsible for Collecting Maharashtra Professional Tax?

Employers have to register for a Professional Tax Registration Certificate and collect the amount to be deposited with the state government. Employers are liable to collect Professional Tax from the income of their employees.

Self Professional Tax contributors are people who run their own businesses; they are responsible for collecting and paying their own Professional Tax. They need to register with a Professional Tax Enrolment Certificate (PTEC).

How to Pay Maharashtra Professional Tax? Is Any Return to be Filed?

Professional tax can also be paid online through the Maharashtra Goods and Services Tax portal. After this payment, one has to file a return as per their status:

• Employers: Monthly or annual returns need to be submitted as per the number of employees;
• Self-employed individuals: Both payment and returns are required for compliance by March 31.

Both payments and returns are mandatory to remain compliant.

What are the Consequences of Violation of Professional Tax Regulation?

Violating Professional Tax regulations in Maharashtra can result in serious consequences, such as:

• Fines and Penalties: These sanctions range from fines to penalties and might include a minimum of ₹1,000 to 10% of the amount outstanding for delayed payment or failure to file.
• Interest on Outstanding Payments: 1.25% interest per month on outstanding payments of taxes.
• Prosecution: In extreme circumstances, non-compliance is prosecuted.

By making timely payments and filings, you will be sure to avoid these penalties as well as potential legal troubles.

What is the Role of the Maharashtra Government in Professional Tax?

The Maharashtra government is both the collector and implementing agency of the professional tax. The revenue collected is merged with other funds for welfare schemes and public services such as healthcare, education, and infrastructure.

The government conducts regular audits and checks compliance. Along with this, registration, filing, and payment can be done easily through the MGST portal, which is convenient for businesses and individuals and hence improves compliance with tax obligations.

What are the Online Services for Maharashtra Professional Tax?

The Maharashtra government has brought most of the professional tax process into the digital realm, where taxpayers can opt for registration, return filing, and payment directly through the MGST portal. Some of the most important online services can be accessed as follows:

• Online Registration: Employer and self-employed registration for PTRC and PTEC certificates can be done through the MGST portal.
• E-Filing of Returns: One can file returns online, which calculates the amount of tax payable by credit.
• E-Payment: One can make payments through net banking, debit or credit cards, and UPI.
• Download of Acknowledgments and Certificates: Taxpayers can download the Acknowledgments and Certificates of payment and registration.

What are the Maharashtra Professional Tax Compliance Audits?

Every business entity is subjected to periodic compliance audits by the Maharashtra Professional Tax Department. If cases of non-compliance are found in such audits, there may be penalties, interest on unpaid taxes, and even prosecution. 

Salary payment records, professional tax deductions, and returns must also be properly maintained and filed. In case of an audit, these may be demanded.

What is the Voluntary Disclosure Scheme?

Like all other states, Maharashtra also frequently offers voluntary disclosure schemes to taxpayers who have failed to register or comply with professional tax regulations. 

The scheme under these schemes encourages taxpayers to come forward, register, and pay their dues without heavy penalties. Such schemes give businesses and individuals a chance to comply under such schemes without any major financial liability.

What is the Professional Tax for Different Professions?

Although professional tax is levied on all types of professions, some professions have certain guidelines or considerations. Here is a brief description of how professional tax applies to different professions:

For Doctors and Medical Practitioners

A person who is a medical practitioner or doctor has to pay professional tax every year on his income for a year. A person whose salary is more than ₹10,000 per month has to pay ₹2,500 as professional tax annually.

For Lawyers and Advocates

Lawyers, advocates, and legal advisors are also subject to professional tax. The rate is the same as that applicable to other self-employed individuals.

For Freelancers and Consultants

Freelancers and consultants also have to enroll for professional tax and pay accordingly. Otherwise, they will have to pay a penalty in case of non-payment.

What is the Impact of Professional Tax on Businesses and Individuals?

Professional tax, though small in amount, adds up for the businesses and individuals who pay it. For employers, it is another administrative overhead, which requires constant checking and compliance with the various compliance requirements of the department. 

From the individual’s point of view, the amount to be deducted from the income is negligible; however, not complying with it can lead to major problems such as penalties and interest levied over time. 

Professional tax in Maharashtra is one of the important collection mechanisms for the state. 

Hence, employers and taxpayers must be well aware of the rules, regulations, and filing steps so that they stay on track with compliance with the Professional Tax Act. 

Once taxpayers avoid levies, penalties, and similar risks, they contribute largely to the state’s welfare programs.

What are the Recent Updates and Amendments to Maharashtra Professional Tax?

Over the years, the Maharashtra government has amended the Professional Tax Act several times to bring it in line with changing economic conditions.

COVID-19 Relief Measures

The Maharashtra government had given certain relaxations in filing and paying professional tax during the COVID-19 pandemic. The deadlines were extended to provide relief to businesses and individuals suffering due to the economic downturn.

Digital Initiatives

The digitization of the professional tax process has been completed at the Maharashtra government level, with online registration, filing, and payment available. Compliance is streamlined and can be easily managed by a business or individual with their obligations.

In Conclusion

The professional tax system of Maharashtra is a vital part of the state’s revenue collection mechanism. It is essential for both employers and individuals to understand the rules, regulations, and filing procedures. 

By complying with the Professional Tax Act, taxpayers can avoid penalties and contribute to the state’s welfare programs.

In the end, we hope all of you that you need this blog post about Maharashtra Professional Tax and you will get very deep information about all our assets, and at the same time, you will not have to face the complexity once again on this blog.

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