`Professional Tax`: Chennai Corporation`s new target to improve revenue

Chennai Municipal Corporation or Chennai Corporation is constantly working to increase its revenue and now it's targeting to bring professional tax at par with the property tax. With its weak financial position, the Chennai Corporation is exploring various options to increase revenue and strengthen its finances in line with the guidelines of the World Bank.

During its last council meeting, the Chennai Corporation agreed to rope in private teams to reassess 2.7 lakh buildings to bring them into the property tax net. The corporation collected property tax worth Rs 697 crore in the first half of the financial year 2022-23.

The corporation will now work to update its database of companies functioning in its jurisdiction and hopes to increase both - professional tax collection as well as property tax collection. 

According to reports, the corporation won't be increasing its professional tax rates but will work to match the professional tax database with the company registration database, and GST registrations and utilise the data to bring more assessees into the professional tax net.

The corporation officials noted that the professional tax collection, if assessed properly, could match property tax once all the employees are covered under it. According to a report, around 1.51 lakh professionals pay taxes to the Corporation at present.

What is professional tax?

It's a direct tax levied by the state government and is applicable to individuals who earn money under the professional tax structure. Professionals like lawyers, doctors and chartered accountants come under its ambit. In Tamil Nadu, professional tax is levied as per the Tamil Nadu Town Panchayats, Municipalities and Municipal Corporations (Collection of Arrears of Tax on Profession, Trades, Calling and Employment's) Rules, 1998.