Profession tax-Maharashtra

Profession tax-Maharashtra

In Maharashtra profession tax is governed by Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975. It has come into force from 1st April, 1975.

Levy and charge of tax

As per section 3, every employer excluding firms [whether registered under the Indian Partnership Act, 1932 or not] and Hindu undivided family is liable to pay to the tax. Provided the said tax per employee shall not exceed Rs. 2,500 [as per article 276]. Section 4 stipulates that it is employer's liability to deduct and pay tax on behalf of employees. If an employer [not being an officer of Government] fails to pay the tax as required by or under the Act, he shall without prejudice to any other consequences and liabilities which he may incur, be deemed to be an assessee in default in respect of the tax.

Exemptions

Section 27A provides for exemptions from deduction and payment of profession tax in case of certain types of employees. Some important exemptions are as under:

[i]

Person suffering from permanent physical disability.

[ii] Parents of mentally retarded child.

[iii] Parents of a child suffering from a physical disability.

[iv] Persons who have completed the age of 65 years.

Rate of deduction of tax from employees salary or wages

Salary or Wages per month	Rate of tax per month
Below Rs. 5,000	Nil
Rs. 5,000 to Rs. 10,000	Rs. 175
Above Rs. 10,000	Rs. 200 for 11 months & Rs. 300 for the month of February

Liability to file return and payment of tax for employer

Tax Liability	Periodicity	Months of salary to be covered	Due Date
Less than Rs. 50,000 in previous year	Annual	March of the previous year and April to February of the current year	31st March
Rs.50,000/- or more in previous year	Monthly	Salary of previous month	End of the month for which return is filed
In case of first year of registration	Monthly	Salary of previous month	End of the month for which return is filed

Penalties and Interest

1) Penalty for "late application" for enrolment/registration [Section 5(5)]

The prescribed authority may impose penalty of Rs. 5 for each day of delay in case
of an employer for registration and of Rs. 2 for each day of delay in case of any person for enrolment, after giving a reasonable opportunity of hearing.

2) Penalty for giving "false information in any application" for enrolment/registration [Section 5(6)]  

The authority may impose penalty equal to 3 times the tax payable under the Act, after giving hearing opportunity.

3) Penalty for "late filling of returns" by Employer [Section 6(3)]

The authority may impose penalty of Rs. 300 per return.

4) Penalty for "Non-payment or late payment of tax" by Enrollee/Employer [Section 10]

The authority may impose a penalty equal to 10% of the tax due.

5) Interest on late payment of tax [Section 9(2)]

The interest for late payment of tax or any additional demand of tax raised in assessment is 1.25% per month or part thereof. Section 9[2A] further states that where the amount of tax payable is more than the amount of tax paid by the employer, then such employer shall be liable to pay simple interest on the amount of difference of tax at the rate and in the manner laid down in subsection (2).

6) Interest on refund of excess payment of tax [Section 19A]

If any refund is due from any order in respect of period 1.4.2004 and onwards then interest on refund @ 6% p.a. is receivable by such person entitled to refund, for maximum 18 months.

This Article has been shared by Saurabh Wagle. He can be reached at [email protected]