Professional tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 July 2015 If a person is a director in a company registered in West Bengal(where the Professional Tax Act applies) however he stays in Delhi (where there is no Professional Tax Act)

Then should he be liable to pay Professional Tax @2500 pa.?

Querist : Anonymous

Querist : Anonymous (Querist)

08 July 2015 If a person is a director in a company registered in West Bengal(where the Professional Tax Act applies) however he stays in Delhi (where there is no Professional Tax Act) Then should he be liable to pay Professional Tax @2500 pa.?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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10 August 2024 Yes, in this scenario, the director would still be liable to pay Professional Tax (PT) as per the provisions of the Professional Tax Act applicable in West Bengal, despite residing in Delhi. Here’s a detailed explanation:

### **1. Professional Tax Liability**

#### **1.1 Director's Liability**
- **Professional Tax Act**: Professional Tax is governed by state-specific laws. In West Bengal, the West Bengal Professional Tax Act, 1979, applies.
- **Director's Responsibility**: Even though the director resides in Delhi, the liability to pay PT is determined by the place of employment or the company's location. Since the company is registered in West Bengal, it falls under the jurisdiction of West Bengal’s Professional Tax Act.

#### **1.2 Tax Application**
- **Tax Rate**: For directors, West Bengal imposes a professional tax of ₹2,500 per annum. This rate is applicable irrespective of the director’s place of residence.
- **Filing and Payment**: The company in West Bengal is responsible for deducting and remitting the professional tax on behalf of its directors.

### **2. Key Points to Consider**

#### **2.1 Registration and Compliance**
- **Company's Obligation**: The company must register for Professional Tax and obtain the necessary certificates (PTRC and PTEC) from the West Bengal Commercial Taxes Department.
- **Payment**: The company should deduct the professional tax from the director’s remuneration and remit it to the state government.

#### **2.2 Residence and Jurisdiction**
- **Place of Employment**: Professional Tax liability is based on the place of employment or where the company is registered, not the place of residence. Therefore, even if the director lives in Delhi, the PT obligations are governed by West Bengal's regulations.

### **3. Procedure for Compliance**

#### **3.1 For the Company**
1. **Obtain Registration**: Ensure the company is registered for Professional Tax in West Bengal.
2. **Deduct PT**: Deduct ₹2,500 annually from the director’s remuneration.
3. **Remit PT**: Pay the deducted amount to the West Bengal state government.
4. **File Returns**: Submit PT returns as required by the West Bengal Professional Tax Act.

#### **3.2 For the Director**
- **Ensure Compliance**: Ensure that the professional tax is being deducted and paid by the company as per West Bengal regulations.

### **4. Conclusion**

Regardless of where the director resides, the liability to pay professional tax is determined by the location of the company. Since the company is registered in West Bengal, the director is subject to the professional tax rate applicable in West Bengal, which is ₹2,500 per annum.

If you have further queries or need assistance with compliance, consulting with a tax professional or accountant familiar with West Bengal's Professional Tax regulations can provide more tailored guidance.

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