Profession Tax as per Kerala Municipal Act, 1994 (Section 254)

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As per the as per Kerala Municipal Act, 1994 (Section 254) it is mandatory for all employees who are drawing a half yearly salary of more than Rs. 12,000/- to pay profession tax. This tax is to be paid to the respective corporation/ municipality in which the company is situated. The tax slab is as mentioned in the below table.

Sl.No Half Yearly Income Half Yearly Tax
1 Rs 12,000 to Rs 17,999. Rs 120
2 Rs 18,000 to Rs 29,999 Rs 180
3 Rs 30,000 to Rs 44,999 Rs 300
4 Rs 45,000 to Rs 59,999 Rs 450
5 Rs 60,000 to Rs 74,999 Rs 600
6 Rs 75,000 to Rs 99,999 Rs 750
7 Rs 1,00,000 to Rs 1,24,999 Rs 1,000
8 Rs 1,25,000 and above Rs 1,250

The Profession Tax for the first half year (April – September) should be paid on or before August 31 and for the second half year (October – March) should be paid on or before February end. Normally the Secretary, Corporation/Municipality will issue a notice to the Managing Director/ Owner of the company to intimate the payment of profession tax for the corresponding period.

The delayed payment will attract a penalty at the rate of 1% per month. Also the penalty for not paying the profession tax will charge a fine of Rs. 5000/-.

For the submission of profession tax, it is mandatory that the below details are furnished.

Sl.No Name Designation Monthly Salary Salary x 6 months Profession Tax

For the calculation of salary, Basic, Special Allowance, Dearness Allowance, Bonus, Extra Income (arrears, leave surrender etc if any) to be added. Again a declaration by authorized authority that we have included all the employees for the payment of profession tax, company seal, authorized signatory are also essential. The photocopy/ original of the profession tax payed for the previous period (if available) is to be submitted while submitting the tax.

On submission of tax, the company will be issued with a receipt by Secretary, Corporation/ Municipality.