Professional Tax
Introduction to Professional Tax
Professional Tax is a tax levied by the State government. Professional tax is levied on income however earned in any trade and is usually paid by the employer. The provision detailing the stipulations attached to Provisional Tax, caps the total professional tax payable in respect of any one person to the State or to any local authority in the State by way of taxes on professions, trades, callings, and employments shall not exceed two hundred and fifty rupees two thousand and five hundred rupees per annum.
Professional tax is just like Income Tax except for the fact that Income Tax is collected by the Central Government and Professional Tax is collected by the State Government. When this tax was first introduced in India, the maximum limit on the tax to be collected was Rs. 250.
Some of the State Governments have represented that the earlier celling of two hundred and fifty rupees which was fixed in 1949, needs to be revised upwards taking into consideration the price rise and other factors. It is also pointed out that the professional tax has, at present, become almost regressive because of the ceiling since even people with high salaries have to pay this tax at only the maximum amount of two hundred and fifty rupees per annum. The upward revision of professional tax has helped the State Governments in raising additional resources.
Professional Tax Rate
The maximum amount payable per annum towards professional tax is INR 2,500. The professional tax is usually a slab-amount based on the gross income of the professional. It is deducted from his income every month. The state governments of the following states have levied professional tax – Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh. In case of Salaried and Wage-earners, the Professional Tax is liable to be deducted by the Employer from the Salary/Wages, and the Employer is liable to deposit the same with the state government. In case of other class of Individuals, this tax is liable to be paid by the person himself.
Employer’s Responsibility for Professional Tax
The owner of a business is responsible for deducting professional tax from the salaries of his employees and paying the amount so collected to the appropriate government department. He/she has to furnish a return to the tax department in the prescribed form within the specified time. The return should include proof of tax payment. In case of not enclosing the payment proof, the register will consider the return incomplete and invalid.
Professional Tax Registration
The professional tax registration application must be to the State’s tax department within 30 days of employing staff in a business. If there is more than one place of work, file an application separately to each authority as regards the place of work coming under the jurisdiction of that authority
Delay in obtaining Professional Tax Registration Certificate incurs a penalty of Rs. 5/- per day. In case of late or non-payment of profession tax, the penalty will be 10% of the amount of tax. In case of late filing of returns, it imposes a penalty of Rs. 300 per return.
Professional Tax in Tamilnadu
Professional Tax is a tax levied on professions and trades in India. It is a state-level tax and has to be compulsorily paid by every member of staff employed in private companies. The owner of a business is responsible to deduct professional tax from the salaries of his employees. He can then pay the amount so collected to the appropriate government department. In this article, we look at Professional Tax in Tamilnadu with emphasis on the process for registration, professional tax rates and professional tax return filing.
Tamilnadu Professional Tax Registration
Professional tax in Tamil Nadu applies to every company which transacts business and for persons engaged in any profession, trade, calling, or employment. The professional tax is calculated by self-assessment and is based on the half-yearly gross income of the employee or professional. In Tamilnadu, businesses can obtain Professional Tax Registration by submitting the application for registration for Professional Tax along with the required documents to the Revenue Office or Divisional License Inspector. For Professional Tax registration in Chennai, Tamilnadu, the forms registration can be obtained from the Corporation of Chennai at Ripon Building, Chennai.
Professional Tax Rates in Chennai
The following are the slabs of Professional Tax in Chennai:
- Up to Rs.21,000 of Half-Yearly Income – NIL
- Rs.21,001 to Rs.30,000 of Half-Yearly Income – Rs.135
- Rs.30,001 to Rs.45,000 of Half-Yearly Income – Rs.315
- Rs.45,001 to Rs.60,000 of Half-Yearly Income – Rs.690
- Rs.60,001 to Rs.75,000 of Half-Yearly Income – Rs.1025
- Rs.75,001 and above of Half-Yearly Income – Rs.1,250
Cheque, challan, or demand draft is the way to pay for the professional tax in Tamilnadu. The due date for payment of Professional Tax and Filing of Professional Tax Return in Tamilnadu is 1st April and 1st October for the respective half-year.
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