Currently, 17 Indian states levy professional tax on employed or self-employed individuals, and Tamil Nadu is also one of them. Professional tax in Tamil Nadu is one of the state's major revenue sources. It applies to employees and individuals associated with all trades, professions, calling and employment.
In this Article we will learn about professional tax in Tamil Nadu.
The Tamil Nadu state government imposed a professional tax on every salaried employee working in government and private sectors and self-employed individuals in any business or profession, such as doctors, engineers, lawyers, chartered accountants, freelance professionals, etc. Those working in Tamil Nadu must pay professional tax according to the applicable income slab and professional tax rate.
Employers deduct professional tax from employees' salaries monthly or half-yearly, and self-employed people deposit professional tax half-yearly (in six months). However, professional tax paid by salaried employees can be claimed as a deduction under the old income tax regime while filing an ITR.
Professional tax in Tamil Nadu is levied under the Tamil Nadu Panchayats, Municipalities and Municipal Corporations Rules, 1998. This rule came into effect on October 01, 1998, and is applicable to all towns, panchayats, municipalities and municipal corporations in the state. In Tamil Nadu, businesses and individuals associated with any profession, trade, calling, or employment are subject to professional tax.
According to Section 138C of Tamil Nadu Municipal Laws Second Amendment Act 59 of 1998, professional tax in Tamil Nadu is applicable for the following categories:
Additionally, private establishments owned by a business are subject to professional tax. A Hindu Undivided Family (HUF), any company, firm, corporation or other corporate body, any society, club, group of people or association are also liable to pay this tax.
The application must be in Form 1 along with the below-mentioned docs
In Tamil Nadu, the revised amount of professional tax payable is based on the average half-yearly income of an individual/entity, implemented from the Financial Year 2024-2025 for Greater Chennai Corporation (GCC).
Look at the table displaying the Tamil Nadu professional tax slabs.
Average Half-Yearly Income | Half-Yearly Professional Tax Amount |
Up to Rs 21,000 | Nil |
From Rs 21,000 to Rs 30,000 | Rs 180 (Rs.360 Per Annum) |
From Rs 30,001 to Rs 45,000 | Rs 425 (Rs.850 Per Annum) |
From Rs 45,001 to Rs 60,000 | Rs 930 (Rs.1860 Per Annum) |
From Rs 60,001 to Rs 75,000 | Rs 1025 (Rs.2050 Per Annum) |
Above Rs 75,000 | Rs 1250 (Rs.2500 Per Annum) |
Now that you know the professional tax slab rates in Tamil Nadu and related details, let’s examine the process for online payment.
If you are a salaried individual or employer, you can pay professional tax online.
Step-1: First, visit the Greater Chennai Corporation official website and click on 'Online Services’ from the available options.
Step-2: Once redirected, click on ‘Professional tax’.
Step-3: Log on to the new page using the username and password.
Step-4: Enter the number of employees, and automatically calculate the professional tax due amount.
Step-5: Follow the on-screen instructions to pay your professional tax. Choose your preferred payment mode like debit card, credit card or net banking and complete the transaction.
For the first half-year, i.e., from April to September, professional tax payments are due on or before 30 September, and
For the second half year, i.e., from October to March, the professional tax payment due date is on or before 31 March.
If you fail to make the professional tax payment on time, the state government will impose hefty penalty charges.
Employers and individuals who fail to pay their professional tax obligation are subject to a monthly penalty of 2%. Additionally, non-payment of professional tax will draw in an extra penalty of 10%. Also, if you provide false or inaccurate information, you will be accountable for paying a penalty equal to three times the amount of taxes owed.
The following categories of individuals are exempted from professional tax payment in Tamil Nadu:
Every resident in Tamil Nadu who engages in a profession, trade, calling or employment is required to pay this tax to the state government. If you are liable to pay professional tax in Tamil Nadu, make sure to pay it on time to avoid hefty penalty charges.