Tamil Nadu Village Panchayats (Collection of Tax on Profession, Trade, Calling and Employment) Rules, 2000

What the rules govern

The Tamil Nadu Village Panchayats (Collection of Tax on Profession, Trade, Calling and Employment) Rules, 2000 apply to every Village Panchayat. They regulate how Village Panchayats fix, publish, collect and revise tax on professions, trades, callings and employment.

The place of work is the place where the liable person ordinarily carries on the profession, trade, calling or employment. These rules concern work and income within Village Panchayat areas, rather than land ownership or property transactions by themselves.

Who may be affected

The collection process covers employees, employers responsible for pay disbursement, self-drawing government or quasi-government officers, traders and professionals.

Key requirements include:

• Drawing and disbursing officers must recover half-yearly tax from employees' pay in August and January and remit it to the relevant Executive Authority with Form 1.
• Self-drawing officers must pay by cheque or demand draft before the specified September and February deadlines and obtain a payment certificate for their pay bill.
• A trader, professional or employee with average half-yearly income of Rs. 21,001 or above must file Form 2 within the period specified in the rules or by the Panchayat.
• A return must be accompanied by the challan, cheque or demand draft for the tax due. A return without payment evidence is treated as not duly filed.
• A fresh return is required when average half-yearly income or the place of trade, profession or employment changes.

Payment, records and verification

Half-yearly tax must be paid by 30th September for the first half-year and by 31st March for the second half-year. Returns are generally valid for five years, while a pass book or card and permanent account number are issued by the Executive Authority after receipt of the return.

The Executive Authority may randomly verify ten per cent of returns that are not supported by proper income evidence and are not filed for the maximum tax amount. Income tax returns, sales tax returns or other relevant documents may be requested.

Penalties and appeals

Late payment attracts a penalty of one rupee per month or part of a month for every hundred rupees or part of the unpaid tax. An incorrect or incomplete return detected during verification attracts a penalty equal to one hundred per cent of the difference between the revised tax and the tax paid.

A person or drawing and disbursing officer may appeal in writing to the Village Panchayat within thirty days after receiving an order or decision concerning tax or penalty.