The Madhya Pradesh State Tax on Professions, Trades, Callings and Employment Act, 1995
The Madhya Pradesh State Tax on Professions, Trades, Callings and Employment Act, 1995 (commonly known as the Profession Tax Act) came into force with the object of levying tax on professions, trades, callings and employments. This Act may be called the Madhya Pradesh Vritti Kar Adhiniyam, 1995. It extends to the whole of Madhya Pradesh and is deemed to have come into force on the 1st day of April, 1995.
Under the Madhya Pradesh Vritti Kar Adhiniyam (Professional Tax Act), 1995, employers have specific obligations regarding the deduction and remittance of professional tax for their employees.
PT Slab
| Yearly Salary / Wages | PT per Year | Monthly Deduction |
|---|---|---|
| Up to Rs.2,25,000 | NIL | NIL |
| Rs.2,25,001 to Rs.3,00,000 | Rs.1,500 | Rs.125 per month |
| Rs.3,00,001 to Rs.4,00,000 | Rs.2,000 | Rs.166 per month for 11 months and Rs.174 in the 12th month |
| Rs.4,00,001 and above | Rs.2,500 | Rs.208 per month for 11 months and Rs.212 in the 12th month |
Employer's Obligations
- Registration: Employers must obtain a Certificate of Registration from the Profession Tax Assessing Authority. This certificate authorises them to deduct professional tax from their employees' salaries or wages.
- Tax Deduction: Employers are required to deduct the applicable professional tax from their employees' salaries or wages on a monthly basis, in accordance with the prescribed tax slabs.
- Remittance of Tax: The deducted tax must be remitted to the state government within the stipulated time frame. Typically, this involves depositing the tax amount within 10 days after the end of the month in which the deduction was made.
- Filing of Returns: Employers are obligated to file periodic returns in the prescribed format, detailing the salaries paid and the corresponding tax deducted. These returns should be accompanied by proof of tax payment, such as a treasury challan. Failure to include proof of payment renders the return invalid.
- Maintenance of Records: Employers must maintain accurate records of salary payments and tax deductions for all employees. These records should be readily available for inspection by the tax authorities.
- Compliance with Notices: Employers are required to comply promptly with any notices or directives issued by the Profession Tax Assessing Authority.
Special note: if an individual ceases employment during the year, the tax liability is proportionately reduced.
Non-compliance with these obligations can result in penalties, including fines for delayed registration, late payment, or failure to file returns.