Profession Tax for Advocates

Profession Tax for Advocates

This article provides information on Profession Tax payable by Legal Practitioners in Maharashtra.

Are lawyers, advocates, legal practitioners etc. subject to Profession Tax?

Like all other professionals, advocates are also subject to profession tax, though not many legal practitioners are even aware that there exists such a tax. This is applicable only to advocates who are below 65 years of age.

According to the The Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975:

3 (2) Every person engaged actively or otherwise in any profession, trade, calling or employment and falling under one or the other of classes mentioned in the second column of Schedule I shall be liable to pay to the State Government the tax at the rate mentioned against the class of such persons in the third column of the said Schedule….

Employees of a firm receiving a salary need not pay this tax, since it is already getting deducted from their salary on a monthly basis.

What is the amount of tax payable?

According to Schedule I 1. (a) Legal Practitioners including Solicitor and Notaries need to pay Rs. 2500 per annum

What if I have not paid up the tax till date?

As per s. 10. Penalty for non-payment of tax:
If an enrolled person or a registered employer fails, without reasonable cause, to make payment of any amount of tax, within the required time or date as specified in the notice of demand, the prescribed authority may, after giving him a reasonable opportunity of being heard, impose upon him a penalty equal to ten per cent, of the amount of tax due.
As per s. 9. Consequences of failure to deduct or to pay tax:
(3) If an enrolled person fails to pay the tax as required by or under this Act. He shall be liable to pay simple interest at the rate and in the manner laid down in sub-section (2).

This means that the person will need to pay the:

Principal Amount of Rs. 2500 + Simple Interest @ one and a quarter per cent of the amount of the tax payable for each month for the period, for which the tax remains unpaid + a penalty of 10% of the tax amount due.

I have not been practicing, but still hold my sanad / Certificate of Practice. Do I still need to pay Profession Tax?

The Act clearly states that:

3 (2) Every person engaged actively or otherwise in any profession, trade, calling or employment

It is also further clarified in:

s. 2(ca) “engaged”, in relation to any profession, trade, calling or employment means occupied fully or otherwise in such profession, trade, calling or employment, whether any pecuniary benefit or benefit of any nature whatsoever, actually accrues or not to a person from such occupation.

Hence, even if a person is not actively pursuing the profession, but they have the legal ability to, they are liable to pay profession tax.

For how many years does one need to pay the tax?

As per the exemptions 27A(f) the person who have completed the age of sixty-five years need not pay tax. Hence all persons below 65 need to pay tax.

What is the deadline for paying Profession tax?

Profession tax for a certain year is payable by 30th June of that year. So if you are enrolled in March 2012, then you need to pay the profession tax by 30th June 2012.

Can I enroll online for Profession Tax in Maharashtra?

Yes, you can enroll online by following the steps given in this article. Once this is done, you need to submit the documents physically, at the Profession Tax office specified.