Professional Tax is a state-level tax imposed by the local authorities in Kerala on income earned by individuals through employment, profession, trade, or other forms of occupation. It applies not only to salaried employees but also to self-employed professionals, freelancers, and businesses operating within the state. Understanding the applicable Professional Tax slab rates in Kerala is critical for both employers and employees to ensure timely compliance and avoid penalties.
This blog provides a comprehensive overview of the slab rates, who is responsible for paying the tax, the filing procedures, and how OurTaxPartner.com can assist in smooth and hassle-free professional tax compliance.
What is Professional Tax?
Professional Tax is levied by municipal corporations or local self-governing bodies in Kerala under the authority granted by the Kerala Municipality Act, 1994 and Kerala Panchayat Raj Act. The tax is deducted monthly in case of salaried employees and paid directly by self-employed individuals based on their annual income bracket.
Who Pays Professional Tax in Kerala?
- Salaried Employees: Employers deduct the applicable tax from employees’ salaries and remit it to the respective local body.
- Employers: Responsible for registering and filing monthly/annual returns, and remitting the collected tax.
- Self-Employed Professionals: Must voluntarily register and pay their tax based on their professional income slab.
Professional tax is mandatory for anyone earning through employment or self-practice in Kerala. Non-compliance can attract legal penalties, fines, and disqualification from participating in government-related business activities.
Current Professional Tax Slab Rates in Kerala
Though rates may slightly vary based on municipality or corporation rules, the general slab rates applicable across Kerala are as follows:
| Monthly Salary / Income (₹) | Monthly Professional Tax (₹) |
|---|---|
| Up to ₹1,999 | Nil |
| ₹2,000 – ₹2,999 | ₹20 |
| ₹3,000 – ₹4,999 | ₹30 |
| ₹5,000 – ₹7,499 | ₹50 |
| ₹7,500 – ₹9,999 | ₹75 |
| ₹10,000 – ₹12,499 | ₹100 |
| ₹12,500 – ₹16,666 | ₹125 |
| ₹16,667 and above | ₹200 |
Note: These rates are subject to change based on local municipal council or panchayat notifications. It’s advisable to verify the latest rates with your local body or through professional consultants like OurTaxPartner.com.
Employer Responsibilities Under Professional Tax Laws
Every employer who employs people in Kerala must:
- Register for Professional Tax with the local authority.
- Deduct tax from employees’ salaries as per slab rates.
- Remit the deducted tax within due dates (usually monthly or quarterly).
- File professional tax returns regularly (monthly/annually as prescribed).
Documents Required for Registration and Filing
Employers and self-employed professionals must prepare the following:
- PAN Card and Aadhaar Card of applicant
- Address proof of the establishment
- Details of employees with salary structure
- Trade license or registration certificate
- Bank details
Due Dates for Payment and Filing
While most municipalities require monthly deductions to be remitted within the 5th or 10th of the following month, the return filing schedule may differ:
- Monthly Payment: By 5th of each month
- Annual Return: By April 30 of the subsequent financial year
Missing deadlines can result in penalties or interest on the overdue amount. To avoid such risks, consider professional assistance from OurTaxPartner.com.
Penalties for Non-Compliance
Failure to comply with professional tax rules may lead to:
- Late fee and interest on tax payable
- Fines up to ₹5,000 or more based on municipal rules
- Cancellation of business licenses in severe cases
To avoid legal and financial consequences, it’s crucial to ensure accurate deductions, timely payments, and error-free filings.
Benefits of Professional Tax Compliance
- Improves your business credibility and rating with local authorities
- Essential for renewing trade licenses and business permits
- Mandatory for government tenders and subsidy applications
- Ensures smooth salary processing and legal payroll structure
Why Choose OurTaxPartner.com?
Professional tax compliance is a recurring responsibility that demands accuracy and punctuality. OurTaxPartner.com offers full-service solutions including:
- New registration for businesses and freelancers
- Monthly deduction and return filing
- Employee-wise calculation of PT based on salary slabs
- Compliance advisory for different municipalities
From Kochi to Kozhikode and Thiruvananthapuram to Thrissur, our digital support services ensure businesses of all sizes meet their tax obligations without hassle.
Conclusion
Understanding the Professional Tax slab rates in Kerala is essential for both employers and employees to remain compliant and avoid unnecessary penalties. The tax amount may appear nominal, but failing to comply with even small statutory requirements can have severe business implications. Get in touch with OurTaxPartner.com today and ensure your tax responsibilities are handled professionally, accurately, and on time.
