Professional Tax Applicability

If our office is registered in Delhi and we hire an employee in Mumbai. Do we need to pay professional tax.

6 Likes

Hi Rohan !

Yes you need to deduct and pay the professional tax state wise , wherever it’s applicable as per the professional tax law _state wise . but should be deducted from HQ in India.

in detail : Profession Tax For Organizations

An employer organization is required to get registered under the Profession Tax Act and obtain a Registration Certificate under 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 :slight_smile:

  • Annual Profession Tax Liability < Rs. 5000Annual Return.
  • Annual Profession Tax Liability >= Rs. 5000 but < Rs. 20000Quarterly Returns.
  • Annual Profession Tax Liability >= Rs. 20000Monthly 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.

I hope the information would help you to understand how important to pay the professional tax . /state wise.

wishing you all a very happy new year :slight_smile: )

5 Likes

Dear Vineeta,
Thank you so much for the detailed reply. I need your thoughts on one more this.
Few people advise that if you mention this in the employee contract we don’t need to pay professional tax.
" You will be appointed in Gurgaon/Delhi, and your work area will be Mumbai, Maharashtra."
What are your thoughts on this?

4 Likes

Hi @Rohin

Let me also try to share my experience.

I was initially once placed at a office in Mumbai, but my work location was mentioned as Chennai. Since we did not have an office at Chennai, my employer remitted the PF in mumbai region because the place at which the cost centre is placed matters for the PF remittance.

Example: MNC’s like Wipro remit their PF in Delhi for some employees who keep switching their locations.

So at any cost PF needs to be remitted, for sure if the eligibility criteria is met.

3 Likes

P.T is levied by Local Bodies from the residents practicing any profession and thereby earning income within their territorial jurisdiction.

If you have branch offices at different locations and registered under Shop & Establishment act or Factories act,
you have to obtain the Enrollment and registration certificate under respective State’s Profession Tax.

The P.T due to the place of work needs to be deducted and paid over to the respective Local Body.
or by the head office in case of centralized payment of salaries to all employees of the Company.

4 Likes

Thank you for your inputs.
So, If our registered office is in Delhi as we do not have any other office registered anywhere else.

The employees who work for us in Mumbai work from home. So do we register for Professional Tax for those employees?

3 Likes

Yes @Rohin

You have to register them under PT.

3 Likes

Hey Rohan !
Let me explain this to you, my head office in Gurgaon and we issued the work contract from here on our letter head , for pan India , my thoughts is purely related to the practical practice , as also shared and said by Mr Dinesh sir and Mr Amit , if you have branch at different location and registered under shop & establishment act or factories act. you have to do the enrollment and registration under respective state Profession act. according to that company is liable to deducted and paid accordingly by head office or by regional office if registered . so please do not ignore the law and slab for the deduction of the same as per the slab for the respective location . and according to me yes you should please go ahead with the
registration for PT deduction who all working in Mumbai , taking gross salary for more then 10, 000 rupees for women and more then 7500 rupee for men.

rest I would request @Dinesh sir to put his expert view on this . i shared what my organization is following & best of my knowledge .
i hope this would help you :slight_smile:

4 Likes

Dear Rohan,

Employees who are working in Mumbai is On Rolled employee of your organisation.
As mentioned you do not have registered office in Mumbai.

Therefore, you have to deduct P.T. from salary as per Delhi State Govt. policy .

In case if authority ask from you, that why do you not deduct P.T. from salary for said employee, then you might not have no answer.

I hope you are submitting their PF and TDS from Delhi office only so you have to deduct their P.T also.

4 Likes

Thank you so much for your inputs.

This is so helpful.

@avgol.amit.2019 : I was just checking the states where P.T is applicable. Delhi and Haryana does not show PT applicability.

3 Likes
Powered by | India's No.1 Payroll and HR Software.
9000+ Clients
150 Cities
10 Lakh+ Users