Professional Tax Tamil Nadu: Tax Rates, Payment and Applicability

Key takeaways:

• Tamil Nadu Municipal Laws (second amendment) Act, 1998 introduced the professional tax in Tamil Nadu.
   
• Professional tax in Tamil Nadu Is governed by the Tamil Nadu Panchayats, Municipalities and Municipal Corporations Rules, 1998
   
• Local bodies like municipal corporations use this amount for public welfare and services. 

Bonus tip: the professional tax rates are revised once in every five years. According to the Professional Tax Act, these tax rates should increase by 25% and not more than 35%.

 Professional tax is collected by the Tamil Nadu government from people who earn through different professions within the state. 

Imagine Tamil Nadu as a society in which you live and for the maintenance you pay a small amount every month. Similarly, professional tax is a small contribution which you make because you earn within the state. The amount that you pay is used by the government for public services and welfare. 

For example, you work in a company in Chennai and earn ₹45,000 per month. After checking the professional tax slab rates, your employer will deduct the tax amount from your salary every month and deposit the same with the government. This is auto deduction from the employer side and the amount is used for public services. 

What is professional tax in Tamil Nadu?

The Tamil Nadu government imposed a professional tax on every person who is a salaried employee working in any sector and any self employed person. People who are working in Tamil Nadu are obligated to pay the professional tax according to the applicable income slab and professional tax rate. It is important to note that professional tax deducted from a salaried employee can be claimed as a deduction under the old income tax rule while filing an ITR .

What is the professional tax slab rate in Tamil Nadu?

Refer the below table for the professional tax slab rate in Tamil Nadu: 

In Tamil Nadu, the amount of professional tax payable is based on the average half yearly income of an individual. 

What is the applicability of professional tax in Tamil Nadu?

The applicability of professional tax in Tamil Nadu is discussed under section 138 C of Tamil Nadu Municipal Laws Second Amendment Act 59 of 1998. It is applicable on the following: 

• Self employed individuals 
• Salaried individuals 
• Private establishments owned by a business
• Hindu undivided  family
• Any society, company, firm , group of people or corporation also comes under this Act who are liable to pay professional tax. 

The professional tax in Tamil Nadu is applicable on the above categories. 

What is the due date of Tamil Nadu professional tax payment? 

From April to September, professional tax payments are due on or before 30 September. From October to March, the professional tax payment due date is on or before 31 March. 

What is the process of online payment of Tamil Nadu professional tax?

Below is the online process to pay the professional tax in Tamil Nadu: 

Step 1: Visit the official page of Greater Chennai Corporation https://www.chennaicorporation.gov.in/gcc/.

Step 2: click on “Professional Tax”.

Step 3: login using the name and password.

Step 4: enter the number of employees and calculate the professional tax amount to be paid. 

Finally choose your preferred payment option and complete the transaction.

What are the documents required for professional tax registration?

Below are the documents that are required for professional tax registration along with Form 1 application:

• MOA or AOA, incorporation certificate 
• PAN card
• lease agreement 
• Trade license copy

With the help of these documents and application in form 1 you can register for professional tax easily.

Conclusion:

Every person in Tamil Nadu who is earning is required to pay this professional tax to the state government. To avoid any kind of legal actions or penalties, it is important to avoid non payment of professional tax. 

FAQs:

How much is a professional tax in Tamil Nadu?

The professional tax amount depends on your income. For example, if you are earning ₹21,000 to ₹30,000, you have to pay ₹100 on a half yearly basis. Income below ₹21,000 is not liable for professional tax. 

If I (employer) am in state A and my employee is doing work from home in state B. In this case, professional tax will apply to which state? 

In this case, the professional tax will apply according to state B, where the employee works. This is because the professional tax applies according to the state where work is performed and not where the office is located.

What is professional tax and why is it levied?

Professional tax is to be paid by every salaried employee to the government for public welfare. The tax amount is used for public services like road maintenance, health, education, transport, sanitation etc.

 

How is professional tax deducted from our salary?

Professional tax is deducted by the employer from the employee’s salary according to the state’s professional tax rate and is remitted to the state government.

Why should salaried people pay professional tax? 

Salaried people are obligated to pay the professional tax by law. The employer collection mechanism makes administration efficient and also the legislation explicitly includes salary as taxable remuneration.