Professional tax is a significant deduction you’ll often see on your pay slip if you’re a salaried individual in Maharashtra. This tax, mandated by the state government, applies to both self-employed individuals and organizations, depending on their income levels. Here’s a comprehensive guide to understanding and managing your professional tax obligations in Maharashtra.

Professional Tax in Maharashtra: The Maharashtra state government levies professional tax on earned income, as authorized by Article 276 of the Indian Constitution. This tax applies to all salaried employees and professionals, with rates and income slabs set by the state government.

Maharashtra Professional Tax Rule: Under the Maharashtra State Tax on Professions, Trades, Callings, and Employment (Amendment) Rules, professional tax is imposed on salaried employees and self-employed individuals. Employers must obtain registration or enrolment certificates within 30 days of starting their business or profession.

Applicability: Professional tax in Maharashtra applies to Hindu Undivided Families (HUFs), individuals, and various entities like companies, associations, and cooperative societies. Employers of salaried individuals are responsible for deducting and depositing the tax on behalf of their employees.

Online Payment Procedure: To pay professional tax online in Maharashtra, follow these steps:

1. Visit the Maharashtra GST Department’s official website and select the ‘e-payment’ option.
2. Choose the appropriate professional tax act (PTEC or PTRC) based on your status.
3. Enter necessary details like payable amount, payment period, and mobile number.
4. Proceed to payment, and upon successful transaction, you’ll receive an acknowledgement receipt.

Alternatively, you can use the Sales Tax Portal of GRAS for payment, providing essential details and generating a Government Reference Number for payment.

Due Date and Late Payment Penalty: The due date for professional tax payment in Maharashtra depends on the enrolment date. Failure to pay on time incurs penalties, such as 1.25% tax per month for individuals and 2% interest per month for employers.

Exemptions: Certain individuals are exempt from professional tax in Maharashtra, including senior citizens aged 65 and above, parents of physically challenged children, individuals with over 40% disability, and badli workers in the textile industry.

Understanding and fulfilling your professional tax obligations is crucial for both individuals and businesses in Maharashtra. By following the correct procedures and deadlines, you can ensure compliance with state regulations and avoid penalties.

Professional tax is a mandatory levy imposed by state governments on various professions, trades, and employments, not limited to just professionals. It applies to employees, business owners, freelancers, and others whose income exceeds a specified threshold. Despite its name, it’s not solely for professionals. This tax is deductible from taxable income under the Income-tax Act of 1961.

The rate of professional tax varies across states and is typically based on income slabs. However, there’s a maximum cap of Rs 2,500 set by Article 276 of the Constitution. The Commercial Tax Department collects professional tax on behalf of the state government, with funds usually directed to municipal corporations.

Employers are responsible for deducting and remitting professional tax for their employees, subject to state-specific regulations. Employers must obtain registration certificates to pay professional tax on their own trade/profession and to deduct it from their employees’ salaries. Freelancers must also register themselves, subject to any monetary thresholds set by their state.

Payment methods for professional tax vary by state and can be made online or offline. Salaried individuals usually have this tax deducted and remitted by their employers.

Certain categories are exempt from professional tax, including members of the armed forces, individuals with disabilities, parents of disabled children, and others specified by state laws.

Failure to comply with professional tax regulations can result in penalties, varying by state. Late registration, payment, or return submission may incur fines or interest charges. For instance, in Maharashtra, penalties range from daily fees for late registration to monthly interest on late payments and penalties for non-payment or delayed filing of returns.

Under the Goods and Services Tax (GST) system, registered taxpayers are mandated to file returns on a monthly basis. A ‘return’ in this context refers to the documentation required by tax authorities, serving as a record of all taxes collected from customers.

It’s imperative for every individual registered under GST to file returns promptly. Even if a legal entity has no ongoing activity, filing ‘GST nil returns’ is necessary to avoid compliance issues. The advantages of GST return filing include:

• Expansion of the tax base
• Reduced taxes through the consolidation of taxes
• Improved ease of conducting business
• Adoption of a unified platform

A GST return is a comprehensive document detailing the income/sales and expenses/purchases of a tax-paying entity. It must be submitted to the tax administrative authority, with the net tax liability determined based on this return.

In the GST framework, businesses with an annual turnover exceeding 5 crores are required to file two monthly returns and one annual return, totaling 26 filings annually. However, under the QRMP scheme, the number of filings may vary for quarterly GSTR-1 filers, with a total of 9 filings per year, including GSTR 3B and the annual return. Additionally, special cases like composition dealers have separate returns, necessitating 5 filings annually.

The following is a list of GST returns to be filed, along with their due dates as prescribed under the CGST Act:

• GSTR 1: For normal taxpayers, to report sales transactions. Due dates for 2024 are Jan 13th and April 18th for the quarters Oct-Dec and Jan-March, respectively.
• GSTR 2: Includes purchases made during the tax period, to be filed by all normal taxpayers.
  • GSTR 2A: Auto-populated data of inward supplies.
  • GSTR 2B: An auto-drafted ITC statement generated monthly.
• GSTR 3: Contains details of all outward supplies, auto-generated based on GSTR-1 and GSTR-2.
  • GSTR 3B: Summarized details of outward supplies, input tax credit claimed, tax liability, and taxes paid. Monthly payments are due by the 25th of the following month for the first two months of the quarter.
• GSTR 4: Filed annually by taxpayers under the Composition Scheme, due before April 30th of the following year.
• GSTR 5: For non-resident foreign taxpayers, due within 20 days after the end of the calendar month or 7 days after the registration period ends, whichever is earlier.
• GSTR 6: To be filed by Input Service Distributors, due on the 13th of the succeeding month.
• GSTR 7: Filed by those required to deduct TDS under GST, due before the 10th of the succeeding month.
• GSTR 8: Filed by e-commerce operators collecting TCS under GST, due before the 10th of the succeeding month.
• GSTR 9: Annual return for all GST-registered taxpayers, consolidating monthly and quarterly returns.
  • GSTR 9A: Consolidation of quarterly returns filed during the year.
  • GSTR 9B: Annual return containing details filed in GSTR 8.
  • GSTR 9C: Reconciliation filed by taxpayers with turnover exceeding 5 crores in the financial year.
• GSTR 10: Final return filed by individuals upon cancellation or surrender of registration, due within 3 months from the date of cancellation.
• GSTR 11: Filed by individuals issued a Unique Identity Number (UIN), containing data of all inward supplies received and claimed refund.

Collaborating with GST return filing consultants can alleviate the compliance burden for SMEs, allowing them to focus more on their core business activities.

The Long Form Audit Report (LFAR) focuses on identifying deficiencies in the operations and internal control systems of banks. Unlike the Statutory Audit Report, LFAR communicates this aspect comprehensively.

Key points to consider in LFAR:

1. Cash Balance Management:

   • Ensure cash balance remains within prescribed limits.
   • Report excess cash balance regularly.

2. Insurance for Cash Handling:

   • Verify insurance coverage for cash-in-custody and cash-in-transit, usually at the head office level.

3. Balances with Reserve Bank, SBI, and Other Banks:

   • Verify balance confirmation certificates and reconciliation statements.
   • Analyze pending entries and explain discrepancies.
   • Report pending revenue entries older than 6 months.

4. Investments:

   • Physically verify branch-level investments if any.
   • Ensure regular income from investments and timely encashment of matured investments.

5. Advances:

   • Assess credit appraisal, sanctioning, disbursement, documentation, and monitoring.
   • Verify compliance with RBI requirements, evaluation of financial data, and security valuation.
   • Examine sanction procedure, limits, and post-disbursement inspections.
   • Ensure proper execution of loan documents and registration of securities.
   • Monitor periodic review, overdue accounts, and end-use of funds.
   • Assess control over stationery items and management of sundry debit items.

6. Liabilities – Deposits:

   • Verify compliance with KYC norms and operation guidelines for dormant/inoperative accounts.
   • Investigate unusual movements in deposit accounts, overdue/matured deposits, and provision for interest.

7. Other Liabilities:

   • Examine pending entries in bills payable and sundry deposit accounts.
   • Identify unusual items and suggest disposal of outstanding entries.

8. Contingent Liabilities:

   • Review contingent liabilities and discuss legal matters and potential losses with the branch.

9. Profit and Loss Account:

   • Verify interest and commission income, rate changes, and income recognition norms.
   • Analyze trends in revenue and expenditure through comparison and ratio analysis.

10. Audits/Inspections:

    • Review previous audit reports, observations, and non-compliances.
    • Report any frauds discovered during the audit and suggest preventive measures.

11. Miscellaneous:

    • Check fixed asset records, depreciation calculation, and possibility of window dressing.
    • Address any other matters pertinent to the management or central statutory auditors.

Annexure to LFAR:

• Obtain detailed information from branch management for branches dealing with large advances or asset recovery branches, based on outstanding balances.

The LFAR aims to provide a comprehensive overview of the bank’s operations, internal controls, and compliance status, helping identify areas for improvement and risk mitigation

A Systematic Investment Plan (SIP) is a popular method of investing in mutual funds where you invest a fixed amount at regular intervals. SIPs offer several advantages, including compounding invested money, averaging mutual fund purchases, automatic deposits with a minimum investment amount, and suitability for individuals of all ages. They are also beneficial for long-term financial goals like post-retirement planning and securing a child’s future, while also offering tax-saving opportunities.

If you’re seeking SIP investments in Mumbai, Spenny provides an updated list of mutual fund schemes, allowing users to optimize their savings through a “roundup approach.” Our platform offers an automated and personalized portfolio feature, enabling clients to invest in schemes tailored to their savings or preferred investment amounts, thereby maximizing earnings and achieving excellent returns.

Residing in a bustling city like Mumbai, online SIP investments can save you time, effort, and money by offering all investment plans under one roof. Our user-friendly application assists you in selecting the best investment options and strategies based on your savings and preferences. We provide personalized advice to help you secure and stabilize your financial future effectively.

An Income Tax Return (ITR) is a crucial document for taxpayers in India, used to report their income and tax liabilities to the Income Tax Department. It’s mandatory for various entities, including individuals, businesses, and Hindu Undivided Families (HUFs), to file their returns within the specified timeframe to avoid penalties.

There are different types of ITR forms catering to various taxpayer categories:

1. ITR 1 (Sahaj): For individuals with income from salary/pension and one house property, earning less than Rs 50 lakh annually.
2. ITR 2: Used by individuals earning income from asset sales or from foreign sources.
3. ITR 2A: Suitable for individuals/HUFs with income from multiple house properties but not from business or profession.
4. ITR 3: Applicable to individuals/HUFs who are partners in a firm but don’t earn income from the firm’s business.
5. ITR 4 (Sugam): For individuals/businesses/professionals with income from business or profession.
6. ITR 5: Exclusively for firms, local authorities, co-operative societies, etc.
7. ITR 6: For companies except those claiming tax exemption under Section 11.
8. ITR 7: Required for entities like trusts, colleges, political parties, etc., claiming exemptions.

Who should file ITR:

• Assessees with total income exceeding Rs. 5 lakhs.
• Residents with assets outside India.
• Those falling under specific sections of the Income Tax Act.
• Individuals claiming relief or deductions under specified sections.
• Residents with authority over foreign accounts.
• Businesses and entities subject to audit requirements.

The process of filing ITR can be done online or offline:

Online Mode:

1. Determine tax liability.
2. Visit the official income tax e-filing portal.
3. Fill in details and upload required documents.
4. Validate and submit.

Offline Mode:

1. Download relevant ITR form from the portal.
2. Fill details offline and gather necessary documents.
3. Generate JSON file of ITR form.
4. Upload the JSON file on the portal to submit.

The due date for filing ITR for the financial year 2022-23 (Assessment Year 2023-24) without late fees is July 31, 2023. Late filing can attract penalties up to Rs 10,000 for individuals with income over Rs 5 lakh, depending on the delay.

The process of filing IT return involves several steps, which have been mentioned below: