What Is Professional Tax and How to Pay Professional Tax Online?

Professional tax is collected each month by many Indian State Governments on the earnings you get from your work, profession, calling, or salary. 

In the provisions of Clause (2) in Article 276 in the constitution of India in 1949, the state governments were provided with the authority to establish income tax slabs and the tax rates for professional income. The maximum amount of Professional Tax that any government could impose in any state is ₹2,500.

Did You Know?

The highest Professional Tax amount is ₹2500 no matter which Indian state it is. The entire professional Tax paid during the year is permitted as a reduction as per the Income Tax Act.

Also Read: How To Save Income Tax on Income From Salary For Individuals

Who Pays the Professional Taxes?

Before knowing how to pay professional tax, let's know who exactly has to pay it. Taxes on professionals are applicable to employees who are self-employed or salaried. Tax is applicable as a percentage of what they earn in private and government organisations. Professional tax is dependent on a minimum level of income and is imposed according to the slab rates applicable to the state.

Tax payment for professionals is an important source of revenue for the state. The maximum amount that professionals tax online payments have to pay per year is ₹2,500. If you receive a salary, the amount is based on the professional tax slabs for the year as per the schedule.

Traders, architects and lawyers, doctors, company secretaries, chartered accountants and others. Must pay a professional tax to the department of Commercial Tax in the state.

For employees, the employer is the person who has to take deductions and pay taxes on professional services to the State Government subject to the financial threshold.

Exemptions

If you come under the exemptions, you don’t need to worry about how to pay professional tax. There are exemptions available for certain people to pay Professional Tax online and offline as per the Professional Tax Rules.

The following are exempted from paying Professional Tax:

• Parents of children suffering from disabilities are permanent or mental.
• Badli workers work in industries of clothing.
• Forces members as defined by the Army Act, 1950, Navy Act, 1957 and the Air Force Act, 1950, include those who are auxiliary forces or Reservists who are within the state.
• A person is suffering from a physical impairment that lasts forever (including sight impairment).
• The parents or guardianship of those with mental impairment.
• Women are exclusively employed as agents in the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings.
• People over 65 years old.

Process to Pay Professional Tax Online

1. The system allows recording data completion all simultaneously or in a batch.
2. Ensure you have a completed APPT form at hand in need of an emergency. Forms are downloadable from the website, www.apct.gov.in. This will improve data entry speed.
3. Continue to visit www.apct.gov.in for the APPT Registration Process for more information about the application process and the documents that need submission together with the application.
4. Visit www.apct.gov.in and choose Professional Tax or e-registration. After that, the system will launch an entirely new browser to allow mail and password retrieval enrollment.
5. Enter your email address
6. Verify your email
7. Enter the authorization number.
8. Click submit. The system sends an email with your password. Enter your email and look for your password. Then, go back to this site and click "e-registration" on www.apct.gov.in. The system will show the Login Credentials.
9. Enter your email address.
10. Input the password that you received in your email ID.
11. Click on the submit button. New tabs will open.
12. Choose "New Registration." The finish registration option will be displayed.

Rates of Professional Tax Slabs for Maharashtra

Professional tax rates differ between the jurisdictions. This is why the tax structure varies in a different states. Each state has its own set of rules that govern the taxation of professionals in that state. 

In order to charge taxes on occupational income, most jurisdictions apply a slab system based on the earnings. Because of the Professional Tax, the tax is mandatory on individuals earning an income, and most Indian states charge the tax for professionals.

Here are the profession tax slab rates in Maharashtra:

Also Read: What is Tax Withholding on Payments?

Maharashtra Profession Tax: Pay Professional Tax Online

• Go to the Maharashtra Government's GST Department's website. Click on 'e-Payments' and choose the appropriate option for the situation of your tax payment.
• Select PAN, TIN, TAN, in the case of the applicable and then fill in the appropriate number with the captcha displayed within the photo.
• Select the Act that you wish for the money to be paid. If it is for the taxation of professions, the appropriate choice is PTRC Act or PTEC Act. A professional tax certificate (PTRC) is necessary for the business that has an Employer. A professional tax enrollment certificate (PTEC) is necessary for companies to prove their existence and any subsidiary available in the field. Also, commercial activities are important in the State of Maharashtra.
• You can also enter additional information like financial year, time period in which professional tax has to be covered, place of residence, the amount (as per the rate of the slab) and mobile number. Then, click the "Proceed to Pay.
• You can pay on the internet using your credit or debit card or via net banking. 
• After you've completed a successful payment, you'll get an acknowledgement receipt available for download for future use.

Due Date

If you know how to pay professional tax online, your due date will never end. However, the payment date for professional tax is based on the date of enrolment. If a company enrols before the beginning of the year before May 31st, the deadline for tax payment is June 30th. If you enrol after May 31st, you can pay the professional tax within 30 days from the date of enrollment.

However, you can mention it even though the business's accounts depend on maintenance on the basis of mercantile. This is because salary/wages earned for a particular month or year need to be in the record in the same manner. However, for purposes of taxation for professionals, the return period could differ. 

For example, the salary for April is usually accounted for as an expense in April. However, it should be a returned item for professional tax returns this month. The deadline for payment of tax and filing tax returns is May 31st. 

Similar to the situation for returns for the month of May, it will be considered in the other months. In the case of the annual return, salary will be considered for the twelve months beginning on March 1st, 2015, until February 29th 2016. 

Rebates

• Senior citizens above 65 years old are exempt from tax on professions.
• Persons with handicaps that exceed 40% disability or parents of physically or mentally disabled children are exempt from the tax on professions in Maharashtra.

Professional Tax Maharashtra - Fines and Penalties

• Employers are subject to an amount of ₹5 per year for the day that they do not have a professional tax registration.
• Taxpayers who file late on their professional tax returns can result in penalties of ₹1,000.
• The penalty is 10% if non-payment of tax dues for professional employees. In addition, interest on late payments might face a charge as high as 1.25% per month.

Conclusion

Profession Tax is basically a direct tax implemented on individuals earning an income by taking it apart as a profession, calling, employment or trading. Also, as now you know, the maximum professional tax cost is ₹2500, you can work accordingly.
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