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Kerala Professional tax is levied & collected by the local municipal authorities in India (such as Panchayat, Municipalities, etc.). It comes under the purview of Kerala Panchayat Raj (Professional Tax) Rules 1996.
Professional Tax is being handled by the revenue department of the local self-government. In this article, we will study all about Kerala professional tax registration.
The government levies professional tax on persons working in government or non – government entities or any profession (such as CA, CS, Lawyers) or salaried individuals.
It is mandatory for all the employees or persons drawing a half-yearly salary of more than 12,000 to pay Professional Tax under the Kerala Municipal Act, 1994.
The concerned municipal authority assesses professional Tax on a half-yearly basis. The government sets the tax rates according to the income slabs of the individuals.
The income from salary can claim the deduction under section 16 of the Income Tax Act, 1961. However, deductions are not applicable for self-employed persons.
The professional tax slab in Kerala is in the tabular form below.
Half Yearly Income
Half Yearly Professional Tax
Up to Rs.11999
Rs.12000 to Rs.17999
Rs.18000 to Rs.29999
Rs.30000 to Rs.44999
Rs.45000 to Rs.59999
Rs.60000 to Rs.74999
Rs.75000 to Rs.99999
Rs.100000 to Rs.124999
Rs.125000 and above
The entity on which the professional tax will be applicable:
Liability of Members of a firm to pay professional Tax
The professional Tax may be levied from the agents of the firm or association.
Liability of Agents to pay professional Tax
Where a company employs a person to act as an agent, to transact the business in the municipal area, then the professional Tax will be levied on the company’s agent and the company is also deemed to have transacted a business in the area.
The following documents are needed for Professional Tax registration:
The head of the office or the employer will assess the employees liable to tax and recover the employee’s amount and pay that to the municipality before August & February.
The steps for registration of Kerala Professional Tax can be divided into 2 parts:
Step 1: The information has to be provided to the secretary of the concerned municipality within the employer’s prescribed times.
The details include:
The application form for Kerala Professional Tax must be taken from the concerned Municipality Corporation of Thiruvananthapuram.
Step 2: Once the secretary receives the information, he will register the offices’ name in a register maintained for Professional Tax.
Step 3: On the payment receipt, the secretary will issue an official receipt in the head office’s name for the amount remitted.
Step 4: A certificate of recovery and payment of Tax of each taxpayer will be granted to the municipality for the half-yearly by the head office.
The assessment of professional Tax is done every 6 months. The secretary of the concerned municipality, by notice, every half-year (during May & November), asks the employer or the head of office to assess all the company or firm or institution, who is liable to pay professional Tax.
The details given by the employer must contain the names of all the employees with the salary of the employees.
Calculation of Salary for Professional Tax
This includes basic salary, special allowances, dearness allowance, bonus, extra income (such as arrears, leave surrender, etc.).
For delayed payment of the Kerala professional tax, a penalty of 1% per month will be levied.
For non-payment a fine of Rs. 5000/- would be levied.
The government levies Kerala professional tax on persons working in government or non-government entities or any profession (such as CA, CS, Lawyers) or salaried individuals and is governed by Kerala Municipal Act, 1994.
Professional Tax compliance is mandatory for every corporation or person and all form businesses like a sole proprietorship, partnership firms, LLP, private limited company.
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