Professional tax-Kerala is charged by the Government on all the salaried individuals, who are serving under the Government, Non-Governmental organizations or of other professions, such as Chartered Accounts, Lawyers as well as any person engaged in any form of trade. Kerala Government conferred the authority of levelling the professional tax on Kerala Municipality Act, 1994. Kerala professional tax-rate is based on Income wedge stipulated by State Government for such tax. The overall amount of Kerala professional tax remitted during each year is allowable as a deduction under the Income-Tax-Act. This write tends to look into the details about the Kerala Professional Tax.
The Kerala Municipality Act
Concerning the Kerala Municipality Act as Amended in 2015, it is compulsory for every worker who is drawing a ½ (half-yearly) salary that is more than “Rs. 12,000” to remit Kerala professional tax. The Kerala professional tax should be remitted to the authorized body who is the respective “municipal corporation” where the company or organization is based or located. The professional tax wedge is stated in the table below.
Kerala Professional Income Tax-wedge
The professional income tax-wedge Kerala is stipulated as shown on the table below:
|S.No||1/2 Yearly Income||1/2 Yearly Professional Income Tax|
|1||Up to Rs.11999||No charges|
|2||From Rs.12000 up to Rs.17999||Rs.120|
|3||From Rs.18000 up to Rs.29999||Rs.180|
|4||From Rs.30000 up to Rs.44999||Rs.300|
|5||From Rs.45000 up to Rs.59999||Rs.450|
|6||From Rs.60000 up to Rs.74999||Rs.600|
|7||From Rs.75000 up to Rs.99999||Rs.750|
|8||From Rs.100000 up to Rs.124999||Rs.1000|
|9||From Rs.125000 and anything that is more than this||Rs.1250|
The Eligibility standard on which the Kerala-Professional -Tax Registration is based
Kerala professional tax is only applicable to these entities:
- Every company that transacts business or trades in that municipal region for at least sixty days is obliged to pay professional tax.
- Any firm that transacts business or trade outside the boundaries of that municipal area with the headquarters from which the business is managed in that municipal region for 60 days must pay Professional Tax.
- Any individual who practices a profession, or transacts business, or calling or act, or holds an appointment of any kind, private or public in that municipal region for at least sixty days will also need to remit the professional tax.
- Any person who exercises a profession outside the municipal area, but who resides within the municipal area for not less than sixty days is eligible for PT.
- Any individual who transacts business, not in the municipal region but the headquarters or place from where the business is managed is within that municipal region for at least sixty days.
- Any individual residing in that municipality for at least sixty days at an aggregated value, who receives income from any investments, is liable to pay a ½ yearly tax as assessed.
Liability of The Members of any organization or firm to the Kerala Professional Income Tax
The Kerala professional income tax which is chargeable from an organization or association might be charged from an agent of such association or organization,
Liability of the Servants under the Agents to Kerala Professional Income tax
If any firm or company or persons engage an agent or a servant to aid him or her in the business transactions in the municipal region, such a company or the person is deemed to be transacting business in that municipality, and such a servant or an agent is automatically liable for the professional income tax payable in respect to the business transaction of that company or individual.
In such situations where a company or a person is an agent of other company or other persons, this agent company or the person won’t be charged separately for the professional tax, but in connection with the income as that of its principal.
Evaluation of the Kerala Professional Income Tax
Kerala professional year income tax assessment is to be done every 6 months of the year. The corporation as well as the municipality secretary concerned during the month of May & November in the half-year, by notification, requires each head of office or worker to evaluate all employee in that institution who are liable to the professional income tax. This also involves the self-drawing officials to submit their professional income tax which is due as stated as Schedule to the stipulated notice.
The details must bear the identification of every person employed as the officers with a statement of income or salaries of such an employed person.
Computation of the Salary of a person liable for Professional Income Tax
For the computation of salaries of the employees due for Professional income tax, the following are to be included; the Basic salaries, Special Allowances, Dearness Allowances, All Bonuses, All Extra Income such as; arrears, leave surrender or any other not mentioned.
The Documents for “Kerala Professional Income Tax” Registration
These documents must be furnished for the Kerala Professional Income Tax registration.
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Lease Agreement
- PAN Card
- Employer Address Proof & ID Proof & photos
- Employee lists with their salary details
- List of the Board of Directors
Kerala Professional Income Tax Registration-Procedure
The techniques for registering Kerala income professional tax in a simplified way is stated in detail below:
Before every end of the month of August and that of February in each year, the head of every office or worker must evaluate all workers due for payment of tax to recover the tax amount chargeable to him and remit such to the Municipality with the list of the workers who are assessed to income tax.
Steps to Submitting an Application
Step 1: The office head must furnish all the information in the prescribed application form to a secretary of that municipal area in question in the period prescribed in the tax notice form with all documents stated above.
The Following are the details that must be furnished in professional tax application form:
- The name of such Employee,
- The designation of the Employee,
- Half-yearly income,
- The amount of income tax recovered,
The application tax form for the “Kerala Professional Income Tax” can be obtainable from the concerned “Municipality Corporation”. We have attached here a sample of an applicable tax form for the “Thiruvananthapuram municipality corporation” professional income-tax-application form.
The second step involves the secretary registration of the data of the institution or offices furnished to the office on the point of receipt of such information to the state register as required for the Professional income tax purposes.
The issuance of the Receipt for Tax Remittance
Step three: The stated Secretary on the receipt of such payment must tender an “official receipt” bearing the name of the head of an office for such an amount remitted.
Step four: All the head of such offices will have to grant to every taxpayer the certificate-of- recovery as well as payment of tax to their Municipality for a half-year.
Payment of “Kerala Professional Tax” by a self-Drawing officer
Before February ending and August ending in every financial year, any self-drawing officer must remit or force to make payment of his or her professional tax as due from such person in respect to every half-year as stated in the schedule of tax-in-force along with the statement of the details of such half-yearly income. The state Secretary on the receipt of such payment will issue the official receipt.
The Penalty charged for Non-Remittance of Kerala Professional Income Tax
Whenever there is a delayed payment of the professional tax, there will be a penalty attraction. This pay is at a rate of a percent per month. Furthermore, for non- payment, the Kerala profession Income tax will be charged with an extra fine of Rs. 5000.