One of our staff members retired at the age of 60 and now shall be working with us as a retainer. Is professional tax applicable for retainer ship fees? Regards, Jagat
From India, Mumbai
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From India, Mumbai
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Why not? If he is retired but still receiving any fees, professional tax should be paid. Professional tax is not a tax on salaries alone; it is a tax on all revenues. Even doctors and lawyers are supposed to pay tax to the government and local authorities. Therefore, if you are paying a salary (or professional fee), that will inevitably attract tax.
From India, Kannur
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4526From India, Kannur
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The company does not have to pay professional tax for those who are not employees. However, the employee will need to register for professional tax and pay it on their own. For compliance purposes, you can ask for a copy of the challan. She will be exempt only at the age of 65.
From India, Mumbai
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From India, Mumbai
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Exemption from Profession Tax for Senior Citizens
Exemption given to senior citizens from the payment of profession tax is not a general exemption because the issue of collection of profession tax is a state subject, and it need not be the same in all states. Some states have exempted ex-servicemen from the payment of profession tax, but that is not available in all states.
Profession Tax on Revenue and Professional Fees
Profession tax is a tax on revenue and not solely on salary. It is true that in respect of consultants, the employer has no liability to deduct profession tax and pay it to the respective LSG. However, the person receiving professional fees has the responsibility to pay it directly to the LSG. It is important to note that not only individuals receiving salaries but also professionals like lawyers, accountants, doctors, and consultants who earn professional fees should pay profession tax to the LSGs. The amount paid can be claimed as a deduction from the income chargeable to income tax.
Profession Tax for Retainers
In the case of employees continuing service after retirement as a retainer, it is essential to examine how the contract has been structured. If the 'retainer' regularly comes to the office and performs routine work, regardless of the title used or how the payment is labeled, an employer-employee relationship could be established, and the remuneration would be considered as salary. In such a scenario, it becomes the employer's responsibility to pay the profession tax on the remuneration owed to the so-called retainer.
From India, Kannur
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Exemption given to senior citizens from the payment of profession tax is not a general exemption because the issue of collection of profession tax is a state subject, and it need not be the same in all states. Some states have exempted ex-servicemen from the payment of profession tax, but that is not available in all states.
Profession Tax on Revenue and Professional Fees
Profession tax is a tax on revenue and not solely on salary. It is true that in respect of consultants, the employer has no liability to deduct profession tax and pay it to the respective LSG. However, the person receiving professional fees has the responsibility to pay it directly to the LSG. It is important to note that not only individuals receiving salaries but also professionals like lawyers, accountants, doctors, and consultants who earn professional fees should pay profession tax to the LSGs. The amount paid can be claimed as a deduction from the income chargeable to income tax.
Profession Tax for Retainers
In the case of employees continuing service after retirement as a retainer, it is essential to examine how the contract has been structured. If the 'retainer' regularly comes to the office and performs routine work, regardless of the title used or how the payment is labeled, an employer-employee relationship could be established, and the remuneration would be considered as salary. In such a scenario, it becomes the employer's responsibility to pay the profession tax on the remuneration owed to the so-called retainer.
From India, Kannur
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Going by Nityansh's description, it appears the person is continuing to work even after retirement as if an employee as in the past. To confirm this, the payroll should be the basis. If the person is part of the employer's payroll, he/she shall be treated as an 'employee,' and PT applied as per the Maharashtra PT Act/Rules. On the other hand, if he is treated as a 'consultant' and paid through vouchers, then PT is applicable as if he/she is a 'consultant.' In any case, the provisions of The Maharashtra State Tax on Professions, Trades, Callings, and Employments Act, 1975 should be the guidance - read here: https://mahagst.gov.in/en/act/5...
Exemptions clause of the Act in Maharashtra:
[1][27A. Exemptions.- Nothing contained in section 3 and other provisions of this Act shall apply to- [2][(a) the members of the Forces as defined in the Army Act, 1950, or the Air Force Act, 1950, and the members of the Indian Navy as defined in the Navy Act, 1957, serving in any part of the State and drawing pay and allowances as Army or Air Force or Navy, as the case may be, including the members of auxiliary forces or reservists, or reserve and auxiliary services serving in any part of the State and drawing pay and allowances as such auxiliary forces or reservists, or reserve and auxiliary services, as the case may be, under the budgetary allocations of the Defence Services;] [3][Explanation.- It is hereby declared for the removal of doubts that nothing in this clause shall apply or shall be taken to have applied during any period starting on or after the 1st May 2000 to persons drawing pay and allowances from the establishments of the Defence Ordnance Factories situated in any part of the State.]
[4][(a-1) * * *] (b) the badli workers in the textile industry.]
[5][(c) Any person suffering from a permanent physical disability (including blindness), being a permanent physical disability specified in the rules made in this behalf by the State Government, which is certified by a physician, a surgeon, or an oculist, as the case may be, working in a Government Hospital and which has the effect of reducing considerably such individual's capacity for normal work or engaging in gainful employment or occupations: Provided that such an individual or, as the case may be, employer produces the aforesaid certificate before the prescribed authority in respect of the first assessment year for which he claims deduction under this sub-section: Provided further that the requirement of producing the certificate from a physician, a surgeon, or an oculist, as the case may be, working in a Government Hospital shall not apply to an individual who has already produced a certificate before the prescribed authority under the provisions of this sub-section as they stood immediately before the 1st day of April 1995. Explanation.-For the purpose of this sub-section, the expression "Government Hospital" includes a departmental dispensary whether full time or part-time established and run by a Department of the Government for the medical attendance and treatment of a class or classes of Government servants and members of their families, a hospital maintained by a local authority and any other hospital with which arrangements have been made by the Government for the treatment of Government servants;]
[6][(d) Women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana of the Directorate of Small Savings.
[7][(e) Any person with Intellectual and Development Disabilities (Mental Retardation) specified in the rules made in this behalf, which is certified by a psychiatrist working in a Government Hospital and which has the effect of reducing considerably such an individual's capacity for normal work or engaging in gainful employment or occupation and parents or guardian of such person: Provided that such an individual or, as the case may be, employer produces the aforesaid certificate before the prescribed authority in respect of the first assessment year for which he claims deduction under this clause. Explanation.- For the purpose of this clause, the expression "Government Hospital" shall have the same meaning as assigned to it in clause (c);]
[8][(f) the person who has completed the age of sixty-five years.]
[9][(g) parents or guardians of a child suffering from a physical disability as specified in clause (c);]
[10][(h) the armed members of the Central Reserve Police Force to whom the Central Reserve Police Force Act, 1949 (66 of 1949) applies and the armed members of the Border Security Force, to whom the Border Security Force Act, 1968 (47 of 1968) applies and serving in the State.]
[1] Section 27A was inserted by Mah. Act. No.21 of 1976 [2] Clause (a) was substituted by Mah. Act. No.12 of 1991 dt.27.3.1991 and shall be deemed to have been substituted with effect from the 1976 [3] This Explanation was inserted by Mah. Act. No.51 of 2000 [4] This clause was inserted by Mah. Act. No. 9 of 1997, w.e.f. 1.10.96 and was deleted by Mah. Act. No.22 of 2000 dt. 28.4.2000. Prior to its deletion, it read as under: "(a-1) persons on the establishment of Defence Ordinance Factories in any part of the State;" [5] This Clause was substituted by Mah. Act. No.19 of 1996, and shall be deemed to have been substituted w.e.f.1.4.1995. [6] This clause was inserted by Mah. Act. No.9 of 1989, w.e.f. 1.4.89 [7] Clause (e) was inserted by Mah. Act. No. 16 of 1995, w.e.f.18.8.95 and then substituted by Mah. Act. No. 27 of 2014, dt. 26.6.2014, w.e.f. 26.6.2014, Prior or its substitution it read as under: "(e) parents of the mentally retarded child: Provided that such mental retardation shall be duly certified by a registered medical practitioner;" [8] Clause (f) was inserted by Mah. Act. No. 16 of 1995, w.e.f.18.8.95. [9] This Clause was inserted by Mah. Act. No.19 of 1997 w.e.f.1.10.96. [10] Clause (h) inserted by Mah. Act. No. 15 of 2016, dt. 26.4.2016, w.e.f. 1.4.2016...
From India, Bangalore
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Exemptions clause of the Act in Maharashtra:
[1][27A. Exemptions.- Nothing contained in section 3 and other provisions of this Act shall apply to- [2][(a) the members of the Forces as defined in the Army Act, 1950, or the Air Force Act, 1950, and the members of the Indian Navy as defined in the Navy Act, 1957, serving in any part of the State and drawing pay and allowances as Army or Air Force or Navy, as the case may be, including the members of auxiliary forces or reservists, or reserve and auxiliary services serving in any part of the State and drawing pay and allowances as such auxiliary forces or reservists, or reserve and auxiliary services, as the case may be, under the budgetary allocations of the Defence Services;] [3][Explanation.- It is hereby declared for the removal of doubts that nothing in this clause shall apply or shall be taken to have applied during any period starting on or after the 1st May 2000 to persons drawing pay and allowances from the establishments of the Defence Ordnance Factories situated in any part of the State.]
[4][(a-1) * * *] (b) the badli workers in the textile industry.]
[5][(c) Any person suffering from a permanent physical disability (including blindness), being a permanent physical disability specified in the rules made in this behalf by the State Government, which is certified by a physician, a surgeon, or an oculist, as the case may be, working in a Government Hospital and which has the effect of reducing considerably such individual's capacity for normal work or engaging in gainful employment or occupations: Provided that such an individual or, as the case may be, employer produces the aforesaid certificate before the prescribed authority in respect of the first assessment year for which he claims deduction under this sub-section: Provided further that the requirement of producing the certificate from a physician, a surgeon, or an oculist, as the case may be, working in a Government Hospital shall not apply to an individual who has already produced a certificate before the prescribed authority under the provisions of this sub-section as they stood immediately before the 1st day of April 1995. Explanation.-For the purpose of this sub-section, the expression "Government Hospital" includes a departmental dispensary whether full time or part-time established and run by a Department of the Government for the medical attendance and treatment of a class or classes of Government servants and members of their families, a hospital maintained by a local authority and any other hospital with which arrangements have been made by the Government for the treatment of Government servants;]
[6][(d) Women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat Yojana of the Directorate of Small Savings.
[7][(e) Any person with Intellectual and Development Disabilities (Mental Retardation) specified in the rules made in this behalf, which is certified by a psychiatrist working in a Government Hospital and which has the effect of reducing considerably such an individual's capacity for normal work or engaging in gainful employment or occupation and parents or guardian of such person: Provided that such an individual or, as the case may be, employer produces the aforesaid certificate before the prescribed authority in respect of the first assessment year for which he claims deduction under this clause. Explanation.- For the purpose of this clause, the expression "Government Hospital" shall have the same meaning as assigned to it in clause (c);]
[8][(f) the person who has completed the age of sixty-five years.]
[9][(g) parents or guardians of a child suffering from a physical disability as specified in clause (c);]
[10][(h) the armed members of the Central Reserve Police Force to whom the Central Reserve Police Force Act, 1949 (66 of 1949) applies and the armed members of the Border Security Force, to whom the Border Security Force Act, 1968 (47 of 1968) applies and serving in the State.]
[1] Section 27A was inserted by Mah. Act. No.21 of 1976 [2] Clause (a) was substituted by Mah. Act. No.12 of 1991 dt.27.3.1991 and shall be deemed to have been substituted with effect from the 1976 [3] This Explanation was inserted by Mah. Act. No.51 of 2000 [4] This clause was inserted by Mah. Act. No. 9 of 1997, w.e.f. 1.10.96 and was deleted by Mah. Act. No.22 of 2000 dt. 28.4.2000. Prior to its deletion, it read as under: "(a-1) persons on the establishment of Defence Ordinance Factories in any part of the State;" [5] This Clause was substituted by Mah. Act. No.19 of 1996, and shall be deemed to have been substituted w.e.f.1.4.1995. [6] This clause was inserted by Mah. Act. No.9 of 1989, w.e.f. 1.4.89 [7] Clause (e) was inserted by Mah. Act. No. 16 of 1995, w.e.f.18.8.95 and then substituted by Mah. Act. No. 27 of 2014, dt. 26.6.2014, w.e.f. 26.6.2014, Prior or its substitution it read as under: "(e) parents of the mentally retarded child: Provided that such mental retardation shall be duly certified by a registered medical practitioner;" [8] Clause (f) was inserted by Mah. Act. No. 16 of 1995, w.e.f.18.8.95. [9] This Clause was inserted by Mah. Act. No.19 of 1997 w.e.f.1.10.96. [10] Clause (h) inserted by Mah. Act. No. 15 of 2016, dt. 26.4.2016, w.e.f. 1.4.2016...
From India, Bangalore
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