Navigating Professional Tax for Directors in Mumbai and Annual Return Queries

Dear All,

Queries related to Professional Tax

1) My company has its head office in Chennai and a regional office in Mumbai. We have 3 directors, 2 in Chennai and 1 in Mumbai. We are paying employees' PT according to the state's rules (i.e., for Mumbai employees as per PT Maharashtra rule and for Chennai as per Tamil Nadu rules). For Chennai, Employer PT is paid twice a year along with employees' PT. For Mumbai, do I have to pay PTEC for 1 director who sits in the Mumbai office? Is PTEC a tax paid on behalf of the company, or is it an employer's tax deduction? In case 1 more director is added to the company who will work from the Mumbai office, then do I have to pay tax for 2 directors using PTEC?

Annual PT and monthly returns

2) In the year 2016-17, our annual PT was below 50,000/-, so we filed annual returns in the year 2017. For the year 2017-18, in December 2017, we crossed 50,000/-, so do we need to pay monthly returns? If yes, then from which month? If no, then kindly assist us with the month of annual returns payment and also from the next financial year (i.e., 2018-19), do we need to file monthly returns?

Your valuable guidance will be highly appreciated.

Thanks,
S.K.

Response to Query on Professional Tax & Annual Return

1. Regarding the payment of Professional Tax for directors in different locations:
- You are correct in paying Professional Tax (PT) according to the respective state rules for your employees.
- For the director located in Mumbai, you would need to pay Professional Tax Enrolment Certificate (PTEC) for that director if it is required by Maharashtra state rules.
- PTEC is typically a tax paid on behalf of the company for the director. If another director joins the company and works from the Mumbai office, you will need to pay tax for each director based on the applicable state rules. Each director's tax liability is individual.

2. Annual return and monthly return requirements:
- In the scenario where your annual PT crossed 50,000/- in December 2017, you would generally need to switch to monthly returns from the following month, which would be January 2018.
- It's advisable to pay the annual returns for the previous financial year before transitioning to monthly returns for the current financial year (2018-19). This ensures compliance with the tax regulations and avoids penalties.
- Starting from the financial year 2018-19, you should file monthly returns for Professional Tax as per the regulations applicable to your company's locations.

By following these steps and ensuring timely compliance with Professional Tax regulations in both Chennai and Mumbai, you can effectively manage your tax obligations and maintain regulatory adherence. 📝