It is a direct tax charged by individual states on the income of individuals. In Kerala, it is paid by individuals who are earning income. To get a better clarity please refer to the article. It is charged to salaried employees as well as individuals who are engaged in their own businesses.
Professional Tax Act in Kerala
According to the Kerala Municipality Act 1994, the government of Kerala charges this tax on every earning individual including business owners, lawyers, CAs, doctors, engineers etc. The amount of tax an individual has to pay is determined by the tax slab rate in Kerala. The Kerala Municipality Act 2015 states that those employees who earn a half-yearly salary of more than ₹ 12,000 are liable to pay this tax in Kerala.
Applicability of Professional Tax in Kerala
Let’s have a look at the individuals who are required to pay the tax:
1. Organizations that have their headquarters in the municipality area of Kerala for more than 60 days are liable to pay.
2. Owners of organizations who have resided in the municipality area of Kerala for more than a period of sixty years are liable to pay.
3. Those organizations who are operating their businesses in the municipality area of Kerala.
4. If an individual is residing in any municipality in Kerala for more than sixty days irrespective of their workplace location, they are liable to pay.
5. Those individuals who are earning their income or source of livelihood from any municipality in Kerala are liable to pay.
6. If an individual is running any kind of business/ profession in the municipality in Kerala are liable to pay.
Slab Rate of Professional Tax in Kerala
In Kerala, the amount of tax is decided on the basis of half-yearly income in Kerala. Below is the tax slab rate for individuals who are earning in Kerala:
| Half-Yearly Income Range | Payable Tax Amount |
|---|---|
| Upto ₹ 11,999 | Nil |
| ₹ 12,000 to ₹ 17,999 | ₹ 120 |
| ₹ 18,000 to ₹ 29,999 | ₹ 180 |
| ₹ 30,000 to ₹ 44,999 | ₹ 300 |
| ₹ 45,000 to ₹ 59,999 | ₹ 450 |
| ₹ 60,000 to ₹ 74,999 | ₹ 600 |
| ₹ 75,000 to ₹ 99,999 | ₹ 750 |
Source: Cleartax
How to pay Professional Tax in Kerala?
An individual in Kerala can pay tax in Kerala after being registered on the official portal of the Kerala government. Once an individual submits their details on the portal the amount of tax to be paid will be displayed on the screen. But the payment in Kerala is only limited to five states- Thrissur, Thiruvananthapuram, Kannur, Kozhikode and Kollam.
Late Payment Penalty on Kerala Professional Tax
Those individuals who are required to pay professional tax in Kerala must do so with the defined states otherwise a late payment penalty of 1% on the outstanding amount can be imposed and it can be as high as ₹ 5,000.
Exemption of Professional Tax in Kerala
According to the Kerala Professional Tax Rule, certain individuals are exempted from paying. Here is the list of individuals who are liable to pay.
- Those individuals who are physically or mentally disabled
- Members of the Air Force, Navy Force and Army Force
- Individuals aged 65 and above
- Parents of a mentally or physically disabled child
- Those individuals who belong to Mahila Pradhan Kshetriya Bachat Yojana or the Director of Small Savings
- Badli workers who work in the textile industry in Kerala
