Professional Tax in Tamil Nadu Professional Tax in Tamil Nadu

Whether it’s a working individual, a self-employed person, or a business professional, they can only take part of the revenue themselves. As applicable, they must pay tax to the government in the name of income, professional, and other taxes. Around 17 states in India impose a professional tax on their employees. Tamil Nadu is also one of them.

Payroll software to keep payroll on time

Tamil Nadu Professional Tax Act

Professional tax applies to professionals like doctors, lawyers, engineers, teachers, etc. It also applies to people who work in a state and earn income from their work or business. Someone who earns revenue from freelancing work has to pay professional tax to the state government if it levies professional tax. It is one of the most essential revenue-generating sources for the Tamilnadu state government. Employers deduct it from employees as TDS (Tax Deducted at Source) or professional tax.

Village panchayats, town panchayats, municipalities, and city corporations collect professional tax deductions in Tamil Nadu. The experience tax system in Tamil Nadu works under the Tamil Nadu panchayats, municipalities, and municipal corporation rules, 1998, which were effectively followed from October 1, 1998.

Professional Tax Slab Rate in Tamil Nadu

Professional tax slab rates in Tamil Nadu depend upon the individual’s salary range. The deduction of professional tax amounts varies in every state. The government proposes no prescribed amount or norms for the professional tax. However, the central government established that the professional tax collected from the employees should be at most Rs. 2500 per year. The table below mentions the professional tax amount the Tamil Nadu state government deducts for working professionals, which varies according to the salary range.

Sr No. Average monthly salary range Professional tax amount
1 Up to ₹21,000 Nil
2 Between ₹21,001 to ₹30,000 ₹130
3 Between ₹30,000 to ₹45,000 ₹315
4 Between ₹45,001 to ₹60,000 ₹690
5 Between ₹60,001 to ₹75,000 ₹1,025
6 Above ₹75,000 ₹1,250

When Do You Pay Professional Tax in Tamil Nadu?

The due period is different for all states as they follow different norms. The Professional tax is paid twice a year in Tamil Nadu. Working professionals, self-employed individuals, and business professionals are obliged to pay professional taxes every year on April 01 and October 01. In case of a failure of professional tax payment, the government puts the penalty for the non-paid dues in different percentages according to how long the due was not paid.

Automate your payroll with factoHR

Tamil Nadu Professional Tax Late Payment Penalty

Penalty is standard for all non-paid bills and dues. Likewise, the state government is imposing penalties for not paying professional tax dues. It puts a penalty of 2% of the taxable amount for each month until the tax is settled down. If the employee provides a false statement or information to the government, the employee has to pay a penalty of 3X the actual payable tax amount

Exemption From Professional Tax in Tamil Nadu

Like income tax, professional tax also has some eligibility criteria laid down by the state government of Tamil Nadu. Those who do not meet the eligibility criteria need not pay professional tax. The state government exempted some people from paying professional tax, and they are listed below.

  1. People who earn under Rs. 21000/-
  2. Women working under Mahila Pradhan Kshetriya Bachat Yojana or the Director of Small Savings.
  3. Employees or business professionals having children with mental disability.
  4. Badli workers
  5. People who work in the military as per the Navy Act 1957, the Army Act 1950, and the Air Force Act 1950.

Conclusion

All individuals who generate revenue and fall under the eligibility criteria for professional tax must pay the professional tax to the government of Tamil Nadu. It is the responsibility of every working professional to contribute to the state. This is one of the most significant revenues for the government, which, in turn, is reflected in public welfare schemes. It is essential to be aware of the taxes and to pay on the due date. A corresponding fine should be applied to the individuals in case of failure. To avoid the penalties, it is crucial for all working or revenue-generating professionals to know the eligibility chart of Tamil Nadu state and pay if applicable.

Zero error payroll processing with factoHR

Frequently Asked Question

Where to Pay Professional Tax in Tamil Nadu?

It can be done in the regional office of the village panchayat, town panchayat, municipal, or corporation office. It can also be done online through the official website.

Is It Compulsory to Pay Professional Tax in Tamil Nadu?

Professional tax is mandatory for other taxes if the individual meets the eligibility criteria for professional tax in Tamilnadu.

Does Any Other State Employee Need to Pay Professional Tax in Tamil Nadu?

Employees from other states working or generating revenue in Tamil Nadu by any means must pay the professional tax if they meet the eligibility criteria.

Employers Can Pay Professional Tax in Tamil Nadu?

In most cases, the employer pays the professional tax to the government by deducting it from the employee’s salary package.

Can Self-Employed People Pay Professional Tax by Themselves?

Yes, self-employed professionals who earn more than Rs.21000/—and meet all other eligibility criteria can pay the professional themselves in the stipulated regional office or through the official website of the Tamil Nadu state government.

Request Free Trial