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Professional Tax Kerala

Professional tax is a tax levied on individuals on the working class - salaried individuals, working in Government or Non-Government entities or of any profession. This also includes Chartered Accountants/Lawyers or persons carrying out some form of business.

Kerala Municipality Act

The power of levelling professional tax stems from Kerala Municipality Act, 1994, under the Kerala Government. As per the Kerala Municipality Amendment Act, 2015, it is mandatory for all individuals who are drawing a half-yearly salary of more than Rs. 12,000 to pay Kerala professional tax. Also, as per the Section 16 of the Income Tax Act, 1961, the amount paid by the salaried individual as profession tax can be claimed for income tax deduction.

Kerala Professional Tax Slab

Professional tax rates are based on the Income slabs set by the state government. The tax slabs are mentioned below:

Half Yearly IncomeHalf Yearly Professional Tax
Up to Rs. 11999Nil
Rs. 12000 to Rs. 17999Rs. 120
Rs. 18000 to Rs. 29999Rs. 180
Rs. 30000 to Rs. 44999Rs. 300
Rs. 45000 to Rs. 59999Rs. 450
Rs. 60000 to Rs. 74999Rs. 600
Rs. 75000 to Rs. 99999Rs. 750
Rs. 100000 to Rs. 124999Rs. 1000
Rs. 125000 and aboveRs. 1250

Eligibility Criteria for Kerala Professional Tax Registration

The following entities are eligible for professional tax registration:

  1. Any company which transacts business in the municipal area for not less than sixty days.
  2. Any company transacts business outside the limit of the municipal area, but has its head office from which its business is controlled within the municipal area for sixty days.
  3. Any person who exercises a profession, art or calling or transacts business or holds any appointment, public or private within the municipal area for not less than sixty days.
  4. Any person who exercises a profession outside the municipal area, but who resides within the municipal area for not less than sixty days.
  5. Any person who transacts business outside the municipal area, but has his head office or place from which his business is controlled within the municipal area for not less than sixty days.
  6. Any person who resides in the municipal area for not less than sixty days in the aggregate and receives any income from investments, will have to pay a half-yearly tax assessed.

Assessment of Kerala Professional Tax

Assessment of professional tax in Kerala is done for every 6 months. The assessment takes place every May and November every half-year. As per the procedure, every head of office or employer is required to assess every employee in his/her institution liable to professional tax and every self-drawing officer to remit the professional tax due following the schedule. Details consists of the names of all the persons employed as officers along with a statement of the salary or income of such employed persons.

Calculation of Salary for Professional Tax

For calculation of salary for professional tax, the following elements are taken into consideration:

  1. Basic Pay
  2. Special Allowance
  3. Dearness Allowance
  4. Bonus
  5. Extra Income (arrears, leave surrender etc., if any)

Documents for Kerala Professional Tax Registration

The documents required for Kerala Professional Tax Registration are:

  • Memorandum of Association
  • Articles of Association
  • PAN Card
  • Lease Agreement
  • Employer Address Proof and ID Proof and photos
  • Employee list with salary details
  • List of Board of Directors

Kerala Professional Tax Registration Procedure

The following process needs to be followed for Kerala Professional Tax Registration:

  • Step 1: As mentioned above, the head of office has to submit the information in a prescribed application form to the secretary of the concerned municipality with the following documents:
    • Name of Employee
    • Designation of Employee
    • Half-yearly income
    • The amount of tax recovered

The application form for Kerala Professional Tax has to be obtained from the concerned Municipal Corporation. In this case, it is the Thiruvananthapuram Municipality Corporation.

  • Step 2: The secretary will register the name of the offices or institutions in a register maintained for the professional tax.
  • Step 3: Post submission and payment, the secretary will issue an official receipt in the name of the head of the office for the amount remitted.
  • Step 4: Every head of the office will in turn grant a certificate of recovery to each taxpayer and payment of tax to the Municipality for the half-year.

Penalty for Non-Payment of Kerala Professional Tax

Any delayed payment will attract a penalty of 1% per month. Post non-payment, the profession tax will charge a fine of Rs. 5000.

FAQs on Professional Tax in Kerala

What is Dearness Allowance?

Dearness Allowance is a cost of living adjustment allowance paid to government employees, public sector employees and pensioners.

What is the official website of Kerala Professional Tax?

The official website of Kerala Professional tax is lsgkerala.gov.in/

What is certificate of recovery?

A certificate of recovery is a document issued by the municipal authority which states that Kerala Professional Tax has been paid successfully.

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