Professional Tax for executive directors

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This discussion clarifies Professional Tax (PT) obligations for executive directors in a Maharashtra Pvt Ltd company. Initially, directors paid PTEC individually. However, once directors started drawing salaries as executive directors, the company should deduct PT under PTRC. Directors who draw salaries generally do not need to pay PTEC themselves, especially if they don't have their own separate business. Professional fees or sitting fees received by directors do not change this, as PT is levied on salary income.

Anil

Anil (Querist)

12 March 2020 Hello,
We are a pvt ltd company in Maharashtra. For the first year directors of the company were not employees and not drawing salaries. For that year all directors applied for PTEC and paid @2500 for the year.
From next financial year directors became executive directors and started drawing salaries. Question is
Now should directors pay PTEC @2500 and should company also deduct 2500 PTRC for them ? but that would mean double taxation which in my opinion should not happen. Which one of two taxes need to be paid in this case PTEC individually by director or PTRC by company ?

Eswar Reddy S

Eswar Reddy S (Expert)

12 March 2020 If the Directors draw salary then company should deduct PT under employees PT.They may apply for cancellation of EC. Need not pay PT... Employer PT will be paid by Company

Anil

Anil (Querist)

13 March 2020 Thanks for the reply. I just missed to update that directors apart from being employees also draw professional fees (sitting fees, consulting fees). I hope even then PTEC is not applicable to them. Pls confirm.

Eswar Reddy S

Eswar Reddy S (Expert)

14 March 2020 It's not applicable to Directors unless they have their own business..

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