Professional Tax in Tamil Nadu

Updated: 20-05-2024 10:28:17 AM

Profession Tax is a state government direct tax imposed on the income earned by a wide range of people pursuing various professions. In the following sections, we will discuss key features of Profession Tax in Tamil Nadu  as well as the importance of this direct tax for the government.

What is the Purpose of Levying Profession Tax?

The reason for levying any sort of tax by the government is to generate revenue in order to build robust infrastructure, pay government workers like police personnel, firefighters; ensure defence of the country, etc. Besides that, the government uses these funds for public welfare programs including child development and women’s welfare schemes. There are many different types of taxes that are imposed on the citizens e.g. income tax, capital gains tax, corporate tax, customs duty, etc. A common direct tax imposed by the state government is the professional tax.

Professional Tax is dependent on the gross income of professionals and salaried people.  It is deducted from the salaries of all employees each month. When it involves a company, directors of the company, partnerships, individual partners, self-employed and businesses, it is deducted from the gross turnover of the company recorded in the previous year. In certain cases, the disbursement of tax is preset and is to be paid irrespective of what the turnover is. The slab for professional tax varies in each state across India.

Professional Tax Pointers for New Businesses

If you are thinking about starting a company of your own, there are some key rules and regulations you need to follow pertaining to professional tax. These key rules are as follows:

• Application of registration should be made to the assessee’s state tax department within 30 days of employing staff
• Mandatory Registration of employees within 30 days of employment should be done
• The professional tax amount will be deducted from the salary of the employee
• In the case of 20-plus employees, the payment should be made within 15 days from the month end
• If there are less than 20 employees, payment should be made every quarter of the year
• In case the assessee has multiple places of work, then applications should be sent to each authority under its respective jurisdiction
• The last date for filing of profession tax returns in Tamil Nadu is the last day of September and the last day of March i.e. twice a year.

Who Gets Exemption from Professional Tax in Tamil Nadu

The following is a short list of individuals who are exempted from the profession tax in Tamil Nadu:

• Anyone who is above 65 years of age
• Guardians or parents of children with mental disability
• Women agents involved exclusively under the Director of Small Savings or Mahila Pradhan Kshetriya Bachat Yojana
• People who have a permanent physical disability, including blindness
• Textile industry Badli workers
• Military personnel of the forces as delineated under the Air Force Act 1950, the Navy Act 1957 and the Army Act 1950 plus members of the auxiliary forces or reservists working for the state

Professional Tax in Tamil Nadu

Tamil Nadu is one of the relatively small number of states in India that actually levies profession tax on its citizens. Anyone who gets a salary or any sort of income would come under the profession tax structure. For complete understanding of who all come under the profession tax and how it is levied, you can visit the official government website http://www.tn.gov.in/dtp/professional-tax.htm. This tax is compulsory, but you can claim the income tax deduction on the amount paid as profession tax.  Constitution of India Article 276 states that the total amount payable as profession tax should not exceed Rs. 2500. The registration process for professional tax in Tamil Nadu can be completed online.

Revised Professional Tax in Tamil Nadu

The slab of the profession tax has been revised for Tamil Nadu in the year 2018. Now, it involves a new provision of tax on employment and calling as well as professions and trades. Profession Tax for the following categories will be calculated on a half-yearly basis:

• Companies
• Salaried people (State & Central Government)
• Private Establishments
• Individuals

As per the Tamil Nadu Municipal Laws Second Amendment Act 59 of 1998, section 138 C, “Any individual occupied in any trade, profession, employment and calling in the city limits of the Corporation of Greater Chennai, will have to pay the half-yearly Professional Tax. It will be calculated based on the gross income that is declared half-yearly as follows:

Average Monthly Income (Half-yearly/Rs.)		Revised Profession Tax (Half-yearly/Rs.)	Old Profession Tax (Half-yearly/Rs.)
Up to 21,000		NIL	NIL
21,001 to 30,000		135/-	100/-
30,001 to 45,000		315/-	235/-
45,001 to 60,000		690/-	510/-
60,001 to 75,000		1025/-	760/-
75,001 and above		1250/-	1095/-

Documents Required for Professional Tax Registration in TN:

The following is the list of documentation required for the registration process under profession tax rules of Tamil Nadu:

• Shops and Establishment Trade License Copy/Registration Certificate
• Lease Agreement
• PAN Card
• Articles of Association
• Memorandum of Association & Incorporation Certificate

These requirements are subject to periodic change as per directions provided by the Tamil Nadu state government.

Tamil Nadu Profession Tax Payment Procedure

Property tax should be paid within 15 days from the commencement of half-year i.e. the month of September and March.

• Payment can be made to all zonal offices of the respective municipal authority within the state of Tamil Nadu by cheque or demand draft.
• In the case of Greater Chennai Corporation, payment of profession tax can be done online by visiting the website of GCC as explained in the following steps:

  Step 1 – Log on to the Greater Chennai Corporation website and click on ‘Online Payment’ option shown in the left-hand bar.

Step 2 – Now, select and click on ‘Profession Tax’ tab shown among the various options.

Step 3 – Log on to the new page using your user name and password. If you are not a registered user, please register yourself first by clicking on ‘Not Registered’ option.

Step 4 – Now you can know the profession tax due amount using your profession tax number mentioned on the profession tax payment receipt of earlier years. Online payment of profession tax in Tamil Nadu can be completed using your credit card, debit card or net banking of major banks in India.