Updated on April 02, 2025 06:40:32 PM
Professional tax is the state tax on a person who is involved in various professions, trades, callings, employments and the rules and regulation towards the professional tax varies from state to state in India. In Tamil Nadu the said tax is calculated with reference to the Tamil Nadu State Tax on Professions, Trades, Callings and Employments Act, 1975. It is also a vital form of taxation aimed at generating income for local bodies as well as the state government to finance different services and development undertakings. Since it is targeting both employers and employees it means that they should have adequate knowledge on how the professional tax in the state works.
In the case of employees, the employer is obligated to subtract the tax amount from the employees’ wages and pass the money to the government while the independent workers are expected to register and pay their professional tax independently. The registration process requires filling of all the forms and the documents to the appropriate authorities, and fees depend on the income bands as provided by the government. Any non-compliance with these professional tax regulations has consequences in terms of penalties, interest or even legal proceedings being instituted which explains why registration and payment must be done in time. Being abreast with the various fees, time bar and penalties averts knock-on effects on employers and employees making it necessary for compliance with state tax laws.
Professional tax is the state-level direct tax levied by the different Indian states from individuals and other legal entities involved in different professions, trades, and employment. Income tax is the tax levied by the central government and is the same throughout the country, but the professional tax is the tax that is collected by every state government of India, and that’s why different states have different rates of professional tax and different rules and regulations also.
The ambit of professional tax certification embraces all manner of professions and trades and extends to different professions and professions such as doctors, lawyers, and accountants, as well as business and corporate firms, among others. There are also some differences in the rates of professional tax and its regulations in different states of India depending on the profession or type of business.
Registering for professional tax is beneficial since it is legal and has practical values. Below are some benefits of professional tax registration:
Online registration of Professional Tax In Tamil Nadu is possible through the official site of Tamil Nadu Commercial Taxes Department. Below is the process to be followed while registering for Professional Tax in Tamil Nadu:
The application for professional tax registration has to be done on Form I if the applicant is an employer or on Form II if he is an employer. This application should be made within 30 days from the period when one is responsible to pay the professional tax.
It can be done online under the reference of the Tamil Nadu Commercial Taxes Department. Candidates are required to complete some of the enclosed forms and submit the necessary enclosures like:
Finally, once the application has been approved, the TIN will be assigned and this will be required in all the transactions that involve taxes.
Certificate of Enrolment: Once registration is complete, a certificate of enrolment is issued to the employer through which employees’ salaries can be withheld for professional tax.
The documents required for professional tax registration vary depending on whether you are registering as an employer or an individual. Here’s a comprehensive list of the documents typically needed for both types of registrations:
For Companies/LLP/Partnership
For Individual
The professional tax in Tamil Nadu is structured based on income slabs:
| Monthly Gross Salary | Amount Payable as Professional Tax |
|---|---|
| Up to ₹7,500 | Nil |
| ₹7,501 to ₹10,000 | ₹175 per monthh |
| ₹10,001 to ₹21,000 | ₹200 per month |
| ₹21,001 to ₹30,000 | ₹100 per half-year |
| ₹30,001 to ₹45,000 | ₹235 per half-year |
| ₹45,001 to ₹60,000 | ₹510 per half-year |
| Above ₹60,000 | ₹1,095 per half-year |
Note: Professional fees for Professional Tax Registration is ₹2000
Failure to register or pay the professional tax on time can lead to a significant penalty of 2% per month on the outstanding amount may be imposed for late payments.
Professional tax is a state tax which is paid by the people involved in a number of professions trade, callings, and employments which is governed under the Tamil Nadu State tax on Profession Trade Callings and employments Act, 1975. Non-compliance with the provisions of the act attracts penalties and these may reach up to 2% on the amount for every month that the non-compliance persists. Under the pay as you earn system the employer is to deduct tax for employees while the self-employed have to register individually. This means that the fees charged depend on the income bands in an aim to properly tax. Compliance with professional tax regulations is important in the running of businesses to ensure that they are not dragged to court for legal reach.
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
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To register for professional tax, you have to go through the Tamil Nadu Commercial Taxes Department official website and attach the documents and fill the forms.
It is important to note that in the event you do not make a payment of the professional tax on time there will be a penalty of 2% per month on the said amount until the amount is paid.
Professional tax is payable from the employee’s salary and the employer is supposed to deduct it and deposit it to the treasury. Hence, the tax is payable directly by everyone who operates a business for himself or herself.
As a rule, professional tax is paid on a monthly basis or half yearly, depending upon the incomes slab and the particular provisions.
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