Vocational Skills in Accounting Notes

Syllabus

UNIT I: Introduction
●​ Meaning and concept of business startups
●​ Meaning of Direct Tax and Indirect Tax
●​ Meaning and concept of Person, Previous Year, Financial Year under Income Tax Law
●​ Meaning and concept of Digital Signature
●​ Application and Registration procedure of Digital Signature
●​ PAN & TAN application for business under Income Tax Act, 1961
●​ Business Registration under UDYAM / UDYOG AADHAR

UNIT II: Registration under various statutes

●​ Registration of business under The Maharashtra State Tax on Professions, Trades,
Callings and Employments Act, 1975
●​ Business Registration under The Employees’ Provident Funds and Miscellaneous
Provisions Act, 1952
●​ Business Registration under The Employees’ State Insurance Act, 1948

External Examination: Semester End External – 30 marks

Time: 1 hour

Format of Question Paper

Attempt any 2 out of 3 questions.
Question No. Nature of Questions Marks
Q1 Theory 15
Q2 Theory 15
Q3 Theory 15
Total 30

Note:
1.​ Equal weightage is to be given to all the modules.
2.​ 15 marks question may be subdivided into:
o​ 8 marks + 7 marks
o​ 10 marks + 5 marks​
Internal options may be given; however, it is not mandatory.

Meaning and Concept of Business Startups – Key Points

●​ A startup is a newly formed business created to introduce a new product, service, or
idea.
●​ It usually begins on a small scale with limited resources and a small team.

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 ●​ Startups focus on innovation and solving problems in a new or better way.
●​ They aim for fast growth and scalability in the market.
●​ Startups often involve higher risk but have the potential for high returns.
●​ They use modern technology, creativity, and new business models to operate.
●​ Startups commonly attract funding from investors, angel investors, or venture capital.

Direct Tax

●​ A direct tax is a tax levied directly on an individual or an organization’s income

or wealth.
●​ The burden of this tax cannot be shifted to someone else – the person on whom it is
imposed has to pay it.

Examples: Income tax, corporate tax, wealth tax, property tax.

Indirect Tax

●​ An indirect tax is a tax levied on goods and services, not directly on income or
wealth.
●​ The burden of this tax can be shifted – the seller collects it from the buyer and then
pays it to the government.

Examples: Goods and Services Tax (GST), customs duty, excise duty.

👉 In short:
●​ Direct tax = paid directly to government by taxpayer.
●​ Indirect tax = collected through goods/services by intermediaries and then paid
to government.

Basis Direct Tax Indirect Tax

Meaning Tax paid directly to the Tax paid indirectly on goods

government on income, and services through
wealth, or property. intermediaries.

Burden Cannot be shifted – paid by Can be shifted – collected

the person on whom it is from consumers by sellers
imposed. and then paid to the
government.

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 Examples Income Tax, Corporate Tax, GST, Customs Duty, Excise
Property Tax, Wealth Tax. Duty, Entertainment Tax.

Nature Progressive (higher income Regressive (affects rich and

→ higher tax rate). poor equally on
consumption).

Who Pays? Individuals and Consumers of goods and

organizations earning services (indirectly).
income or holding wealth.

Collection Method Collected directly by the Collected by

government from taxpayers. sellers/producers and
deposited with the
government.

Impact on Inflation Usually does not affect Directly increases the price
prices of goods directly. of goods and services.

Person Definition:

Under the Income-tax Act, 1961, the term “person” is defined in Section 2(31).

It includes the following categories:

1.​ An Individual – A single human being.

2.​ A Hindu Undivided Family (HUF) – Joint family under Hindu law.
3.​ A Company – Domestic or foreign companies.
4.​ A Firm – Partnership firms including LLPs (Limited Liability Partnerships).
5.​ An Association of Persons (AOP) or Body of Individuals (BOI) – A group of
persons who come together for a common purpose.
6.​ A Local Authority – e.g., Municipal corporations, Panchayats, etc.
7.​ Every Artificial Juridical Person (AJP) – Any non-natural person not covered
above but recognized by law, e.g., deities, idols, trusts, universities.

👉 In short, “person” under the Income Tax Act is a very broad term covering not only
individuals but also groups, entities, and institutions.

Assessee [Section 2(7)]

●​ An assessee means a person by whom any tax or any other sum of money is payable
under the Income-tax Act.

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 ●​ It also includes:
○​ A person against whom any proceedings have been taken under the Act.
○​ A person deemed to be an assessee (e.g., legal representative of a deceased
person).
○​ A person deemed to be an assessee in default (e.g., employer not deducting
TDS).

Previous Year [Section 3]

●​ The previous year means the financial year immediately preceding the assessment
year.
●​ In simple terms, it is the year in which income is earned.
●​ For example:
○​ If the assessment year is 2024–25, then the previous year is 2023–24 (1st
April 2023 to 31st March 2024).

Assessment Year [Section 2(9)]

●​ The assessment year (AY) means the period of 12 months starting from 1st April
every year to 31st March of the next year, in which the income of the previous
year is assessed and taxed.
●​ In simple terms, it is the year in which income is taxed.
●​ Example:
○​ Income earned during previous year 2023–24 is assessed in assessment year
2024–25.

👉 In short:
●​ Previous Year = Year in which income is earned.
●​ Assessment Year = Year in which income is assessed and taxed.
●​ Assessee = Person responsible to pay tax.

Digital Signature Certificate (DSC)

A Digital Signature Certificate (DSC) is a secure digital key that validates the identity of an
individual or organization. It contains information such as your name, email, country, public
key, and the name of the certifying authority.

Legal Overview ⚖️
Under the Information Technology Act, 2000, India formally recognized digital signatures
as legally valid. Here are the key legal points:

●​ Section 3 of the IT Act, 2000 provides the legal framework for digital signatures
using asymmetric cryptography and hash functions.​

●​ A Digital Signature Certificate (DSC) issued by a licensed Certifying Authority

(CA) has the same legal standing as a handwritten signature.​

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 ●​ Documents signed with a DSC are admissible as evidence in a court of law.​

●​ The Controller of Certifying Authorities (CCA) regulates and licenses Certifying

Authorities to issue DSCs.​

👉 This ensures that electronic records and digital contracts in India are legally enforceable,
safe, and authentic.

Key Features and Benefits ✨

●​ Security: Provides a high level of security for online transactions.

●​ Authentication: Verifies the user's identity electronically.
●​ Data Integrity: Ensures that the signed data has not been altered after signing.
●​ Non-Repudiation: Prevents the sender from denying they sent the data.
●​ Time-stamping: Records the exact time of signing a document.

Who Can Use a DSC?

Anyone who needs to sign a document electronically can use a DSC. This includes:

●​ Individuals: For filing income tax returns, e-tendering, and other online applications.
●​ Organizations: For company registration, filing annual returns, and e-procurement.
●​ Government Agencies: For secure communication and e-governance initiatives.

Where is a DSC Required? 💻

DSCs are widely used in India for:

●​ E-filing: Income tax returns, GST returns, and corporate filings.

●​ E-tendering: Bidding for government and private tenders.
●​ E-procurement: Participating in online procurement processes.
●​ MCA (Ministry of Corporate Affairs): Filing forms like DIN (Director
Identification Number) application, company incorporation forms, and annual returns.
●​ Trademark and Patent Filing: Submitting applications and documents online.
●​ Customs: For filing import and export declarations.

Types of DSC and Classes

The Controller of Certifying Authorities (CCA) classifies DSCs into different types and
classes based on the level of security and the purpose for which they are used.

Types of DSC:

●​ Signing DSC: Used to sign documents, emails, and forms.

●​ Encryption DSC: Used to encrypt documents and emails to ensure confidentiality.
●​ Combo DSC: A combination of both signing and encryption features in a single
certificate.

Types of Classes:

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In India, both Class 1 and Class 2 Digital Signature Certificates (DSCs) are discontinued,
with Class 2 having been discontinued on January 1, 2021, and Class 1 also having been
phased out. All previously served functions of Class 2 DSCs, such as e-filing government
forms, are now handled by the more secure Class 3 DSC, which is mandatory for various
government and private online transactions and tenders.

Details of Discontinued DSCs:

●​ Class 1 DSC: This class, primarily for email encryption, is no longer issued.
●​
●​ Class 2 DSC: This class, used for e-filing on government portals like MCA, Income
Tax, and GST, was discontinued by the Controller of Certifying Authorities (CCA) on
January 1, 2021.

The Replacement:
●​ Class 3 DSC: This is the current standard for all transactions requiring a digital
signature, including e-filing on government portals, participation in online tenders,
and filing trademarks and patents.

Types of Tokens

A DSC is stored on a physical device known as a cryptographic token or e-token. This

ensures the DSC is portable and secure. Examples of tokens include:

●​ USB Token: The most common type, a USB device that stores the DSC.
●​ Smart Card: A plastic card with an embedded chip that stores the certificate.
●​ SIM Card: Some mobile operators provide DSC on a SIM card.

Validity and Sizing ⏳

●​ Validity: DSCs are typically issued with a validity of one, two, or three years. They
must be renewed before expiration.
●​ Size: The size of a DSC refers to the key length. Most modern DSCs use a 2048-bit or
higher key size for robust security.

Public and Private Key 🔑

The DSC works on the principle of Public Key Infrastructure (PKI). It involves a pair of
keys:

●​ Private Key: A secret key known only to the user. It is used to create the digital
signature.
●​ Public Key: A key that is publicly available. It is used by others to verify the digital
signature created by the private key.

Components of a DSC

A typical DSC contains:

●​ The user's public key.

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 ●​ The user's name and other identifying information.
●​ The name of the Certifying Authority (CA) that issued the certificate.
●​ The validity period of the certificate.
●​ The digital signature of the CA, which verifies the integrity of the certificate.

Procedure to Obtain a DSC

1.​ Select a Certifying Authority (CA): Choose an authorized CA from the list provided
by the CCA.
2.​ Fill out the Application Form: Complete the online application form on the CA's
website.
3.​ Submit Documents: Provide the necessary identity and address proofs.
4.​ Verification: The CA will verify your identity and documents. This may involve a
video or in-person verification.
5.​ Token Issuance: Once verified, the CA will issue a DSC on a physical e-token,
which will be sent to your address.

Documents Required for a DSC (Individual)

●​ Identity Proof: Aadhar Card, PAN Card, Passport, or Voter ID.

●​ Address Proof: Aadhar Card, Passport, Voter ID, or Utility Bills (less than 3 months
old).
●​ Photo: A passport-size photograph.

Certifying Authorities (CAs)

CAs are trusted third parties licensed by the CCA to issue, suspend, and revoke DSCs. Some
of the major CAs in India include:

●​ eMudhra
●​ Sify
●​ nCode Solutions
●​ (TCS) Tata Consultancy Services
●​ IDRBT

Revocation of DSC

A DSC can be revoked (canceled) before its expiry for reasons such as:

●​ The private key has been compromised or lost.

●​ The user's details (e.g., name or organization) have changed.
●​ The certificate was issued incorrectly.

To revoke a DSC, the user must contact the issuing CA and follow their procedure for
revocation.

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1. Permanent Account Number (PAN)

Meaning
●​ PAN is a 10-digit alphanumeric identification number issued by the Income Tax
Department.
●​ It is used to track all financial and tax-related transactions of a business or
individual.

Why PAN is Important for Businesses

●​ Mandatory for filing income tax returns.
●​ Required for:
o​ Opening a bank account in the business name.
o​ Applying for GST registration.
o​ High-value transactions (e.g., above ₹50,000).
o​ Sale/purchase of assets like property.
o​ Receiving payments where TDS is deducted.
●​ Helps the Income Tax Department prevent tax evasion by linking all transactions to
one number.

Application Procedure for PAN

●​ Businesses must apply using Form 49A (Indian entities).
●​ Can apply through:
o​ NSDL e-Gov portal
o​ UTIITSL portal
●​ Required documents:
o​ Proof of identity of business (e.g., Certificate of Incorporation, Partnership
Deed).
o​ Proof of address.
o​ Identity proof of authorized signatory.
●​ After processing, a PAN allotment letter/card is issued.

Where PAN is Quoted?

Following are transactions where PAN is required to be compulsory quoted:
1.​ The sale or purchase of a motor vehicle or a vehicle as defined in clause (28) of
section 2 of the Motor Vehicles Act, 1988 (59 of 1988) requiring registration by the
registering authority under Chapter IV of the said Act, other than a two-wheeler.
2.​ Opening an account [other than the time deposit specified in SR. No. 12 and Basic
Savings Bank Deposit Account] with a banking company or cooperative bank to
which the Banking Regulation Act 1949 (10 of 1949) applies (including any bank or
banking institution referred to in Section 51 of the said Act Act).
3.​ Application for the issue of credit or debit cards to any banking company or
co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies
(including any bank or banking institution referred to in section 51 of the said Act)
or any other company or institution.

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 4.​ Opening of a Demat account with a depository, participant, custodian or any other
person registered under sub-section (1A) of section 12 of the Securities and
Exchange Act of India, 1992 (15 of 1992).
5.​ Cash payment in excess of fifty thousand rupees to a hotel or restaurant at any
one time.
6.​ Cash payment in excess of fifty thousand rupees in respect of travel to any foreign
country or payment for the purchase of any foreign currency at any one time
7.​ Payment in excess of fifty thousand rupees to the Mutual Fund for purchase of its
units.
8.​ Payment exceeding fifty thousand rupees to a company or institution for the
acquisition of debentures issued by it.
9.​ Payment exceeding fifty thousand rupees to the Reserve Bank of India established
under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934) for the
acquisition of debentures issued by it.
10.​Payment of an amount in aggregate of more than fifty thousand rupees in a
financial year as life insurance premium to an insurer as defined in clause (9) of
section 2 of the Insurance Act, 1938 (4 of 1938).
11.​A contract for the sale or purchase of securities (other than shares) as defined in
clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of
1956), exceeding one lakh rupees per transaction.
12.​Sale or purchase of shares of a company not listed on a recognized stock
exchange by any person exceeding one lakh rupees per transaction.
13.​Sale or purchase of any immovable property exceeding ten lakhs rupees or valued
by the Stamp Valuation Authority referred to in section 50C of the Act at an
amount exceeding ten lakhs rupees.
14.​Payment of an amount in aggregate of more than fifty thousand rupees in a
financial year as life insurance premium to an insurer.

Structure of PAN Number (Permanent Account Number)

A PAN is a 10-character alphanumeric code issued by the Income Tax Department.​
Its format is: AAAAA 9999 A

1. First 3 Characters (Alphabetical – A to Z)

●​ Represent a series running from AAA to ZZZ.
●​ They are random alphabetical combinations

2. 4th Character (Alphabetical) – Represents Type of Assessee

This letter indicates the category of the PAN holder:
Letter Assessee Type
P Individual
F Firm
C Company
H HUF (Hindu Undivided Family)
A AOP (Association of Persons)
T Trust

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 B BOI (Body of Individuals)
L Local Authority
J Artificial Juridical Person
G Government

3. 5th Character (Alphabetical)

●​ For individuals: First letter of the surname/last name.
●​ For non-individuals: First letter of the name of the entity.

4. 6th to 9th Characters (Numeric – 0001 to 9999)

●​ A sequential number.
●​ Represents the running number assigned to the PAN holder.

5. 10th Character (Alphabetical)

●​ A check digit used for verifying the correctness of the PAN using a mathematical
formula.

Business Registration Under Udyam / Udyog Aadhaar

1. Introduction

Udyam registration aims to promote the growth and development of Micro, Small, and
Medium Enterprises (MSMEs) in India.

It is applicable to all businesses that meet the basic requirements as per the MSME
Development Act, 2006.

2. Legal Overview

Enterprise (Definition)

As per Section 2(e) of the Micro, Small and Medium Enterprises Development Act, 2006:

"Enterprise means an industrial undertaking or a business concern or any other

establishment, by whatever name called, engaged in the manufacture or
production of goods, in any manner, pertaining to any industry specified in the
First Schedule to the Industries (Development and Regulation) Act, 1951, or
engaged in providing or rendering of any service or services."

●​ Any legal organization/entity engaged in manufacturing, production of goods, or

providing/rendering of services is an Enterprise.​

Forms of Enterprises:

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 1.​ Proprietorship​

2.​ Hindu Undivided Family​

3.​ Partnership Firm​

4.​ Limited Liability Partnership​

5.​ Companies​

6.​ Association of Persons

Eligible Entities

The following forms of organization are eligible for Udyam Registration:

1.​ Proprietorship​

2.​ Hindu Undivided Family​

3.​ Partnership Firm​

4.​ Limited Liability Partnership​

5.​ Companies​

6.​ Association of Persons​

7.​ Body of Individuals​

8.​ Societies​

9.​ Undertakings​

10.​Any other legal entity​

Note: An individual cannot apply for Udyam Registration.

3. Classification of Enterprise

The composite criterion of investment and turnover is used to classify an enterprise as

micro, small, or medium.

An enterprise is classified based on the following criteria:

1.​ Micro-enterprise​

○​ Investment in plant and machinery or equipment does not exceed ₹1 crore.​

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 ○​ Turnover does not exceed ₹5 crore.​

2.​ Small enterprise​

○​ Investment in plant and machinery or equipment does not exceed ₹10 crore.​

○​ Turnover does not exceed ₹50 crore.​

3.​ Medium enterprise​

○​ Investment in plant and machinery or equipment does not exceed ₹50 crore.​

○​ Turnover does not exceed ₹250 crore.​

Notes:

1.​ If an enterprise exceeds the limits set for its current category in either investment or
turnover, it will cease to exist in that category and will be ranked in the next higher
category.​

2.​ No enterprise will be ranked in a lower category unless it falls below both investment
and turnover limits for its current category.​

3.​ All units with the same GSTIN and PAN will be treated together as one enterprise,
and their aggregate investment and turnover will be considered for classification.

Enterprise Investment in Plant and Machinery or Turnover

Type Equipment

Micro Does not exceed ₹1 crore Does not exceed ₹5 crore

Small Does not exceed ₹10 crore Does not exceed ₹50
crore

Medium Does not exceed ₹50 crore Does not exceed ₹250
crore

Calculation of Investment in Plant and Machinery or Equipment

●​ Investment will be linked with the Income Tax Return (ITR) filed for previous
years.​

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 ●​ For a new enterprise where no ITR is available, investment will be based on the
self-declaration of the founder.​

●​ The term plant and machinery or equipment shall have the same meaning as defined
in the Income Tax Rules, 1962.

Calculation of Turnover

●​ Turnover and export turnover information will be linked with the Income Tax Act
and CGST Act along with GSTIN.​

●​ Enterprises without PAN will be assessed on self-declaration basis until 31st March
2021. Thereafter, PAN and GSTIN will be mandatory.​

●​ Export of goods or services or both shall be excluded for the purpose of classification
while calculating turnover.​

4. Benefits of Udyam Registration

●​ It is a permanent registration.​

●​ It provides a basic identification number of the enterprise.​

●​ Paperless and self-declaration based process.​

●​ Any number of activities (manufacturing, services, or both) can be added under one
registration.​

●​ Enterprises can register on GeM and SAMADHAAN portals.​

●​ MSMEs can join TReDS.​

●​ Registered enterprises can avail tax concessions.​

●​ Helps SMEs avail benefits of ministry’s schemes.​

●​ Becomes eligible for priority sector loans from banks.​

5. Priority Sector Lending

●​ Priority Sector Lending (PSL) guidelines are issued by the Reserve Bank of India
vide circular RBI/FIDD/2020-21/72 Master Directions
[Link].5/04.09.01/2020-21 dated September 4, 2020.​

●​ The MSME sector falls under priority sector lending.​

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6. Udyam Registration Process

●​ Any person intending to start a micro, small or medium enterprise can apply online
for Udyam registration at the Udyam registration portal on a self-declaration basis
without any requirement of uploading documents, papers, certificates, or proofs.​

👉
Udyam registration portal:​
[Link] India/[Link]

●​ The Udyam registration process is fully digitized and paperless.​

●​ The registration process is completely free.​

●​ No costs or fees are paid to anyone for registration.​

●​ On registration, an enterprise will be assigned a permanent identity number known as

the “Udyam Registration Number”.​

●​ An e-certificate namely “Udyam Registration Certificate” will be issued online

after completing the registration process.​

●​ The Udyam Registration Certificate has a dynamic QR code that can be used to
access the Udyam Portal website and details of the enterprise.​

Aadhaar Requirement:

●​ Proprietorship firm – Aadhaar of the owner.​

●​ HUF – Aadhaar of Karta.​

●​ Partnership firm – Aadhaar of managing partner.​

●​ Company, LLP, Cooperative Society, or Trust – Authorized signatory must provide

GSTIN and PAN along with Aadhaar.​

●​ If the business is registered as Udyam with PAN, lack of information for previous
years when it did not have PAN will be filled on the basis of self-declaration.​

●​ The online system is fully integrated with Income Tax and GSTIN systems, and data
will be fetched automatically from government databases.​

●​ Exports are not taken as part of turnover calculation.​

●​ Enterprises with EM-II or UAM authorization must re-register by 31.03.2021.​

●​ No enterprise may file more than one Udyam registration.​

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 ●​ All activities (manufacturing, services, or both) can be specified or added in one
registration.​

●​ Misrepresentation or suppression of facts during Udyam registration will lead to

penalty.

7. DOCUMENTS / DETAILS REQUIRED FOR UDYAM REGISTRATION

| 1. | Aadhaar Number | 2. | PAN |

| 3. | Active and Valid Mobile number | 4. | Active and Valid Email Address |

| 5. | Bank Account Details | 6. | Categorisation of ownership of MSME |

| 7. | Address Details | 8. | Status of Enterprises |

| 9. | Number of Person Employed | 10. | Plant and Machinery OR Equipment Details |

8. BENEFITS UNDER MSME SAMADHAAN, MSME SAMBANDH AND MSME

SAMPARK

Enterprises having Udyam Registration can avail benefits available under MSME
SAMADHAAN, MSME SAMBANDH and MSME SAMPARK.

8.1 MSME SAMADHAAN

●​ Any micro or small business with a valid Udyam registration can register with MSME
SAMADHAAN.
●​ The buyer is liable to pay to the supplier a compound interest with monthly
deductions at the rate of three times the bank rate notified by the RBI in case he fails
to pay the supplier for his supply of goods or services within 45 days of taking over
the goods/ services provided.
●​ If aggrieved, Micro and Small supplier can file a complaint against the defaulter
buyer.

8.2 MSME SAMBANDH

●​ The Micro and Small Enterprises (MSME) Procurement Policy Regulations, 2012
directs each Central Ministry/Department/PSU to set an annual target for procurement
from the MSE sector at the beginning of the year.
●​ This is with a view to achieve an overall procurement target of at least 25 per cent of
the total annual purchases of products or services manufactured or provided by MSE.
●​ Out of the 25% annual procurement target, 4% is reserved exclusively for SC/ST
owned MSEs and 3% for women entrepreneur owned MSEs.

8.3 MSME SAMPARK

●​ Recruiter MSME can search for candidates without registration. However, registration
is required to contact candidate registration.
●​ One can search for jobs without registration. However, contacting employers is not
possible without registration on the portal.

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Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975.

1. Introduction

●​ Profession Tax (PT) is a state-level tax levied under the Maharashtra State Tax on
Professions, Trades, Callings and Employments Act, 1975.​

●​ It is applicable to all individuals earning income through employment, trade,

profession, or business in Maharashtra.​

●​ Collected by the State Government, and the revenue is used for development
purposes.​

2. Applicability​

○​ Salaried employees (deducted by employer every month).​

○​ Professionals (CA, doctors, lawyers, architects, consultants, etc.).​

○​ Self-employed persons & traders.​

○​ Companies, LLPs, partnership firms operating in Maharashtra.​

3. Rates of Profession Tax (As per Maharashtra Slab Rates)

🔹 For Salaried Employees: (For Male Employees)

●​ Up to ₹7,500 per month → Nil​

●​ ₹7,501 to ₹10,000 per month → ₹175 per month​

●​ Above ₹10,000 per month → ₹200 per month (Jan–Feb), ₹300 in March​
(So, total maximum = ₹2,500 per year)

For Salaried Employees: (For Female Employees)

●​ Up to ₹25,000 per month → Nil​

●​ Above ₹25,000 per month → ₹200 per month (Jan–Feb), ₹300 in March​
(So, total maximum = ₹2,500 per year)​

🔹 For Self-Employed Professionals & Traders:

●​ Different rates prescribed in Schedule I depending on nature of profession.​

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 ●​ Maximum ₹2,500 per annum.​

●​ Example: Chartered Accountant / Lawyer / Architect → ₹2,500 annually.​

4. Registration

●​ Employer Registration (PTRC):​

○​ Every employer (having employees liable for PT deduction) must obtain

PTRC (Profession Tax Registration Certificate).​

●​ Professional Enrollment (PTEC):​

○​ Every person (like CA, doctor, trader, etc.) engaged in profession/trade needs
to enroll under PTEC (Profession Tax Enrollment Certificate).

5. Payment of Tax

●​ PTEC Holders (Professionals, Companies, Firms, etc.):

●​ For first year: Within one month from the date of Registration
●​ Subsequent year: Pay annually on or before 30th June every year.
●​ Maximum = ₹2,500.​

●​ PTRC Holders (Employers):​

○​ Payment frequency depends on annual tax liability:

Annual PT Liability Payment Frequency Due Date

≤ ₹50,000 Annually By 31st March

> ₹50,000 Monthly Last date of next month

6. Return Filing

●​ Employers (PTRC holders) need to file PT return electronically on the Maharashtra

GST Department website.​

●​ Frequency depends on tax liability:​

○​ Monthly / Quarterly / Annual (as per rules).

7. Exemptions

Certain categories are exempted from PT in Maharashtra, e.g.:

●​ Senior citizens (above 65 years).​

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 ●​ Parents of children with permanent disability or mental retardation.​

●​ Armed Forces personnel.​

●​ Persons with physical disability (≥40%).​

●​ Badli workers in the textile industry.

●​ Women exclusively engaged as agents under the Mahila Pradhan Kshetriya Bachat
Yojana of Directorate of Small Savings.
●​ Mathadi Kamgar

8. Penalties

●​ Delay in registration → Penalty ₹5 per day.​

●​ Delay in payment → Interest 1.25% per month + penalty up to 10% of tax.​

●​ Non-filing of return → Penalty up to ₹1,000 per return.​

9. Real-life Example 1:

●​ Case 1: Employee​

○​ Mr. A earns ₹15,000 per month in Mumbai.​

○​ PT deducted = ₹200/month (Apr–Feb) + ₹300 (Mar) = ₹2,500 annually.​

●​ Case 2: Professional​

○​ A practicing Chartered Accountant must pay ₹2,500 per year as PTEC.

Example 2: Chartered Accountant (Self-Employed)

●​ Practicing CA in Pune.​

●​ Needs to enroll under PTEC.​

●​ Pays ₹2,500 per year on or before 30th June.

Example 3: Company as Employer

●​ ABC Pvt Ltd employs 20 workers in Thane.​

●​ Each employee earns above ₹10,000.​

●​ Employer must:​

○​ Obtain PTRC.​

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 ○​ Deduct PT (max ₹2,500 per employee annually).​

○​ Deposit monthly.​

○​ File PTRC return as per schedule.

10. Online Procedure (Quick Note)

●​ Website: [Link]

●​ Steps:​

1.​ Register for PTRC/PTEC online.​

2.​ Generate challan (GRAS system).​

3.​ Make e-payment.​

4.​ File return (for PTRC).

THE EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS

ACT, 1952

INTRODUCTION

●​ Employee Provident Fund (EPF) compliance is governed by the Employees’

Provident Funds and Miscellaneous Provisions Act, 1952.​

●​ The EPF provides a pension corpus to employees on retirement, which includes

contributions from both, the employer and the employee, along with accumulated
interest.​

●​ Employees can withdraw their EPF funds under certain circumstances such as
retirement, resignation, unemployment or medical emergency.​

●​ EPF contributions and interest earned thereon are exempt from Income Tax under
certain conditions.​

APPLICABILITY

The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 extends to the
whole of India except the state of Jammu and Kashmir and covers:

●​ Every factory engaged in any industry listed in Schedule 1 in which 20 or more

persons are employed.​

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 ●​ Every other establishment employing 20 or more persons or class of such
establishments which the Central Government may announce.​

●​ Any other establishment so notified by the Central Government, even if it employs

less than 20 persons.​

Voluntary coverage is available for establishments with less than 20 employees.

ELIGIBLE EMPLOYEES

●​ Employees employed in an industry who receive wages up to ₹15,000/- per month

will be eligible for the fund.​

●​ Employees earning more than ₹15,000 can also register for an EPF account, but it
requires approval from the Assistant Provident Fund Commissioner.​

REGISTRATION

Employers must register with the Employees’ Provident Fund Organization (EPFO) and enrol
eligible employees within one month of applicability of the Act.

CONTRIBUTION TOWARDS EMPLOYEE PROVIDENT FUND

Employer and employee contribute towards EPF at the rates prescribed in the Act.

PROVIDENT FUND DUE DATES

●​ Employer and Employee PF contribution – Payment: 15th of next month​

●​ Monthly PF return – 25th of next month​

●​ Annual PF return – Financial ending March 31: 30th April of next financial year

2. THE EMPLOYEES’ STATE INSURANCE ACT, 1948

INTRODUCTION

●​ The Employees’ State Insurance (ESI) Scheme is a social insurance measure treasured
in the Employees’ State Insurance Act, 1948.​

●​ It is to protect employees from the impact of unexpected contingencies in the events

of sickness, maternity, disability and death due to occupational accidents and to
provide health care to the insured and their families.​

APPLICABILITY

●​ The Employees’ State Insurance Act, 1948 extends to the whole of India.​

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 ●​ The ESI scheme applies to factories and other facilities viz. Road transport, hotels,
restaurants, cinemas, newspapers, shops, educational/medical facilities, etc., where
ten or more people are employed.​

●​ The ESI scheme is not applicable to seasonal factories and mines.​

BENEFITS PROVIDED UNDER ESI SCHEME

The Employees’ State Insurance Act, 1948 provides for the following six social security
benefits:

a) Medical benefits​
(b) Sickness benefits​
(c) Maternity benefits​
(d) Disablement benefits​
(e) Dependants benefit​
(f) Other cash benefits (Funeral Expenses)

In addition to the above-mentioned benefits, the system also provides the following benefits
to the insured:

●​ Confinement Expenses​

●​ Conveyance Allowance to Permanent Disablement Benefit (PDB) Beneficiaries​

●​ Rajiv Gandhi Shramik Kalyan Yojana (RGSKY)​

●​ Atal Beemit Vyakti Kalyan Yojana (ABVKY)​

●​ Vocation Rehabilitation Allowance​

●​ Skill upgradation training​

●​ Covid-19 Relief Scheme (CRS)​

ESI SCHEME IN MAHARASHTRA

●​ In the state of Maharashtra, the scheme is overseen through its regional office in
Mumbai and six sub-regional offices spread across the state.​

●​ The ESI scheme covers thirty four districts.​

●​ It takes care of lakhs of insured persons and crores of beneficiaries.​

●​ There are branch dispensaries, ESIC Hospitals and ESIS Hospitals in the state of
Maharashtra.​

●​ There are Insurance Medical Practitioners (IMPs) who ensure the delivery of
healthcare facilities to doorsteps in all corners of the state.

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ELIGIBLE EMPLOYEES

Employees of factories and establishments covered by the Employees’ State Insurance Act,
1948, drawing wages up to ₹21,000/- per month, are eligible for social security under the Act.

REGISTRATION OF FACTORIES OR ESTABLISHMENTS UNDER ESI

The employer, in respect of a factory or establishment covered by the Act, shall submit the
Employer’s Registration Form within 15 days of applicability of the Act.

CONTRIBUTION TO ESI

●​ The ESI program is financed by contributions from employers and employees.​

●​ Employees earning up to ₹176/- per day as daily wages are exempted from paying
their share of contribution. However, employers will contribute their own share in
respect to such employees.

DUE DATES

●​ ESI Payment: 15th of next month​

●​ Half Yearly ESI Return: 11th November and 11th May​

3. UNIFIED SHRAM SUVIDHA PORTAL (USSP)

INTRODUCTION

●​ The Unified Shram Suvidha Portal is a “One-Stop-Shop for labour law compliance”.​

●​ This portal has been developed to facilitate one-stop reporting for various labour laws,
consolidated information on labour inspection and enforcement.​

●​ This web portal increases the comfort of reporting, the transparency of labour
inspection and the monitoring of labour inspection based on Key Performance
Indicators.

OBJECTIVES

●​ To provide complete information of labour inspection and its enforcement​

●​ To ensure transparent and accountable inspections​

●​ To facilitate regulatory compliance in a single harmonized form​

●​ To track performance using Key Performance Indicators (KPI)​

●​ To provide an effective complaints handling system​

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FEATURES

●​ Common online registration and submission of self-certified and simplified single

online annual return for multiple labour laws to ease the complexities of compliance.​

●​ Allotment of unique identity i.e. Labour Identification Number (LIN) for effective,
efficient and real-time labour administration.​

●​ Online inspection system and submission of online inspection report to bring

transparency and accountability in the enforcement of labour regulations.​

●​ Unified e-Challan cum Return (ECR) under EPFO/ESIC to support regulatory

compliance by reducing transaction costs and promoting ease of doing business.

SERVICES OFFERED

●​ Generation of Labour Identification Number (LIN)​

●​ Web-based menu driven system for managing, creating, updating inspectable

establishments and managing their inspection reports​

●​ Online entry from the employer/establishment/enforcement agency​

●​ Verification of the entity by the law enforcement agency​

●​ Inspectable Establishments can obtain their login details and passwords online
themselves​

●​ The first stage for the generation of LINs by Chief Labour Commissioner (CLC)
Organisations​

●​ Common filing of EPFO and ESIC monthly returns​

●​ Modification and validation of LIN data​

●​ Expediting CLC and Directorate General of Mines Safety (DGMS) Annual Return
Submission​

●​ Facilitation of monthly filing of Employees’ Provident Fund Organisation

(EPFO)/Employees’ State Insurance Corporation (ESIC) Common Returns​

PROCEDURE FOR EPFO AND ESIC REGISTRATION ON USSP

●​ For Registration, access: [Link]

●​ Unified Shram Suvidha Portal has provided User Manuals for Registration of EPFO
& ESIC.​

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 ●​ Under the tab Download Manual, there are user manuals for EPFO-ESIC
Registration, which are downloadable in PDF format.

[Link] provides the following required

details:

Download User Manual for EPFO-ESIC Registration

●​ Registration under EPFO Act, 1952​

●​ Registration under ESIC Act, 1948​

●​ Common Registration for EPFO & ESIC​

●​ Strictly follow the step-by-step procedure mentioned in the user manual for
registration.

IMPORTANT QUESTIONS FOR EXAM

1.​ Distinguish between Direct Tax and Indirect Tax on the basis of meaning, burden,
examples, collection, and impact.
2.​ Define the terms Person, Assessee, Previous Year, and Assessment Year as per the
Income Tax Act, 1961.
3.​ Explain the structure of a PAN Number and describe the significance of each
character in the 10-digit code.
4.​ What is a Digital Signature Certificate (DSC)? Explain its types, classes, and uses in
e-governance and online compliance.
5.​ Describe the procedure for obtaining a Digital Signature Certificate and list the
documents required.
6.​ Explain PAN & TAN applications for business under the Income Tax Act, 1961.
Discuss their importance and usage.
7.​ Where is PAN quoted? Explain any seven situations where quoting PAN is mandatory.
8.​ What is Udyam Registration? Explain the eligibility, classification of enterprises, and
benefits available to registered MSMEs.
9.​ Explain the Udyam Registration process and the documents/details required.
10.​Write a detailed note on MSME Samadhaan, MSME Sambandh, and MSME Sampark
portals.
11.​Explain Priority Sector Lending (PSL) for MSMEs along with benefits to small
industries.
12.​Explain the Maharashtra State Tax on Professions, Trades, Callings and Employments
Act, 1975 along with its applicability.
13.​Discuss the rates of Profession Tax, exemptions, and penalties under the Maharashtra
PT Act.
14.​Explain the applicability and objectives of the Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952.
15.​Describe the contribution structure, eligible employees, and due dates for PF deposit
and return filing.

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16.​Explain the structure, objectives, features, and services offered by the Unified Shram
Suvidha Portal (USSP).
17.​Discuss the Employees’ State Insurance Act, 1948. Explain its applicability and
significance as a social security system.
18.​Explain the benefits provided under the ESI Scheme and the contribution & due dates.

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