All About Professional Tax in Tamil Nadu

Professional Tax, despite its name, is not a tax that solely applies only to the professionals; but it is a tax that applies to all types of professions, trades, and employment and is based on income. Professional Tax applies to businesses including freelancers, professionals such as doctors, CA and CS and employees in organisations. This tax is imposed within the first 30 days of starting a business or profession. If a business has multiple locations, the professional tax must be registered for each location. So, if you or your business is based in Tamil Nadu, this article on the professional tax slab in Tamil Nadu will cover all the details that you need to know.

Important Definitions under Professional Tax Act 1975

1. Anyone who is paid a wage is referred to as an "employee", such as: 

• A government employee who is paid from the Central Government's or a State Government's revenue; 
• A person hired by a Central Government or State Government controlled organisation, whether incorporated or not, that operates within the confines of the municipality despite its headquarters being located outside the municipal limits; 
• A person working for an employer who is not covered by subclauses.

2. The term "employer" refers to the person or official in charge of distributing an employee's salary regularly under his control, which could include any establishment or office head, as well as the employer's Agent or Manager.

3. "Half-year" means the period from the April 1st to the September 30th, and from the 1st of October to the 31st of March of the following year;

4. The term "month" refers to a calendar month.

5. A "person" is defined as actively or passively engaged in any profession, trade, calling, or occupation. In Tamil Nadu, this includes people from any Hindu undivided family or HUF, firm, company, corporation, or other corporate entity. It also consists of any society, club, group of people, or organisation engaged in such activities but excludes anyone employed casually.

6. "Tax" refers to the tax imposed under this Chapter on professions, trades, callings, and employment.

The  Tamil Nadu Professional Tax on Profession, Callings, Trades and Employment Act (also known as the Profession Tax Act) was enacted to impose taxes on professions, callings, trades, and employments. It encompasses the entire state of Tamil Nadu. TN Profession tax will be  levied from August and January salaries. Also, some corporations and panchayats in Tamil Nadu have different slab rates.

Professional Tax slab in Tamil Nadu:

Profession tax Chennai

Profession tax Tamil Nadu: Salem Corporation

Profession tax Coimbatore 

Profession tax Tamil Nadu: Tirunelveli Corporation

Also Read: Advance Tax- Understanding Advance Tax Payment and its Calculation

Profession tax Tamil Nadu: Madurai Corporation

Profession tax Tamil Nadu: Hosur Corporation

Profession tax Tamil Nadu: Dindigul Corporation

Profession tax Tamil Nadu: Panchayats

Tamil Nadu Profession Tax Act

Rules: 

1. (I) Brief title, application, and beginnings: -

The Town Panchayats, Municipalities, and Municipal Corporations (Collection of Arrears of Tax on Profession, Trade, Calling, and Employment) Rules, 1998.

1. All Municipalities, Municipal Corporations and Town Panchayats in the State are subject to these rules.
2. They are deemed to have entered into force on October 1, 1998.

 2 (I) Filling out the return for the Tamil Nadu professional tax payment of tax arrears on professions, trades, callings, and employment:

Any professional or trader shall file a return in Form-1 who is in arrears of profession tax to the Commissioner of a Municipality or Corporation or the Executive Officer. They should mention the due amount due at the rate which the Council has determined under the provisions of the Tamil Nadu Tax on Professions, Trades Callings, and Employment's Act, 1992 (Tamil Nadu Act 24 of 1992), which was in force from 1st April 1992 to 30th September 1998. As the case may be, the Executive Officer or Commissioner may extend the deadline for filing the return by thirty days starting on December 31, 1998, and no later than February 28, 1999.

3. (1) Tamil Nadu professional tax is paid in the following ways:

(1) A challan in support of payment of arrears of profession tax due by a trader or professional for the beginning on 01.04.1992 must be included in the return under rule-2. Provided, however, that such payment be made within regular business hours at the respective local body's office on all working days.

 (2) A professional or trader should pay the outstanding arrears of professional tax owed up to September 30, 1998, as well as the arrears for periods of more than two and half years during the current half-year. The whole tax arrears owed under the Tamil Nadu Tax discontinued on Professions, Trades, Callings, and Employment Act, 1992 (Tamil Nadu Act 24 of 1992) must be paid within three years after the repeal date.

(3) The Executive officer or, in some cases Commissioner, accepts the return and recognises receipt of the trader's or professional's payment of tax arrears.

4. The following is the government's interpretation of these Profession Tax Act rules:

(1) If some doubt about the interpretation of these rules arises, the issue must be brought to the government, whose judgement is final.

(2) If any difficulty develops in carrying out the requirements of these regulations, the government may issue an order to correct the problem.

Professional Tax Calculation on Salary in Tamil Nadu

Documents for Tamil Nadu Professional Tax Registration:

The list consists of documents required for registering under the Tamil Nadu profession tax rules:

• Trade License Copy/Registration Certificate for Shops and Establishments
• Lease Agreement
• Permanent Account Number or PAN Card
• Association articles
• Memorandum of Association & Incorporation Certificate

These standards are subject to change regularly, as directed by the state government of Tamil Nadu.

People Exempt from Tamil Nadu Professional Tax 

• Foreign employees are not required to pay professional tax.
• Those in charge of educational establishments that offer classes up to the twelfth grade.
• Any disabled person with at least a 40% disability. The necessary certificate, however, must be provided.
• Members of the Armed Forces who are civilian non-combatant and combatants. The Army Act, on the other hand, must govern the Armed Forces.
• Members of the Central Paramilitary Forces (CPMF).
• All philanthropic hospitals exist in areas below the taluk level.
• A person who has only one child and has had a sterilisation procedure. The required documentation, on the other hand, must be submitted.
• Any ex-serviceman who is subject to SI No. 1 (Schedule).
• People who hold a permit to transport products with a single three-wheeler or taxi.
• People who are deaf, dumb, or blind and have a job.
• Foreign technicians who have worked for the government.

Tamil Nadu Professional Tax Registration Process Online:

Citizens can apply for registration of professional tax by going to the website's online portal: www.chennaicorporation.gov.in

1. The applicant will receive their unique username and password through their mobile and email safely after entering their credentials such as mobile number, email ID, etc.
2. The applicant will construct a self-assessment application and submit a TN professional tax application using the Citizen portal.
3. Along with the application, the following papers must be uploaded:

• The Registrar of Companies issued certificate.
• Articles Memorandum (In case of Limited Company)
• Evidence for the Chennai office (Mandatory)
• Commercial Tax Department Certificate
• Bank A/c / PAN card details
• Details of employer and employee (Mandatory)

4. There is no payment at the time of application submission.
5. After the citizen applies, an acknowledgement slip for filing a return with the professional tax registration number will be generated (PTNAN- Profession Tax New Account number).
6. After then, the assessee must pay the tax either online or through any other method.
7. If the assessee has paid the Profession tax Chennai, they can access a copy of the assessment order on the COC website.
8. Once an assessment order is created, the assessment details will be sent to the mailbox of the Zone's corresponding Assistant Returning Officer (ARO) for verification of the applicant's assessment of professional tax.
9. Upon verification, the A.R.O. will either amend the profession tax Chernnai demand if under-assessed or affirm the profession tax assessment if it is deemed correct.

Also Read: Form 26Q: TDS Return Filing for Non-Salary Deductions

Conclusion

Tamil Nadu Professional Tax is calculated based on the gross income of professionals and salaried individuals. Every month, it is withdrawn from the salary of all employees. It is deducted from the previous year's gross turnover when it concerns a firm, its directors, partnerships, individual partners, self-employed individuals, and businesses. In some circumstances, the tax payment is fixed and must be made regardless of the revenue generated. The Professional Tax slab in Tamil Nadu varies from state to state in India. Professional Tax on salaried staff is withdrawn from the employee's pay and remitted with the government by the business. Therefore, we hope we have cleared your doubts regarding Tamil Nadu Professional Tax in this article.

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