Background
The Tamil Nadu Urban Local Bodies Act, 1998 was enacted to provide a comprehensive legal framework for the constitution, governance, and administration of urban local bodies in the state of Tamil Nadu. It consolidates various provisions relating to municipalities and corporations, ensuring uniformity in urban governance. The Act empowers local bodies to manage civic amenities, levy and collect taxes, regulate land use, and implement welfare schemes. Its introduction was aimed at strengthening decentralized administration and improving accountability in urban governance, in line with the spirit of the 74th Constitutional Amendment.
Applicability
The Act applies to: Employer, Company/HUF/firm/corporation/corporate body/society/club/body of persons/association, Practicing professional liable to Register under Tamil Nadu Professional Tax
Compliance under the Act
Certificate of Enrollment under Professional Tax as applicable on the Practising Professional in the State of Operations
Certificate of Registration under Professional Tax as applicable on the Employer in the State of Operations
Every employer liable to pay tax under the Act and these Rules shall file a return to the Commissioner in Form 14, showing therein the salaries paid by him to the employees and the amount of tax deducted by him in respect of such employees. Tax is required to be paid half-yearly to the municipality by 30th September and 31st March every year along with the details in Form 14.
Every person liable to pay tax to the municipality under the Act and these rules other than a person earning salary or wage, shall furnish a return to the Commissioner in Form 15 half yearly, accompanied with challan for payment of tax due for the half year for which return is being filed
The tax payable by any person earning a salary or wage shall be deducted by his employer through the drawing and disbursing officer of the office concerned from the salary payable to such person from the respective pay bill for the month of August and January every year.
Penalties & Punishments
1) For failure to file a return, notice of demand may be issued (Sec 117-E(2))
2) For submission of incorrect return, penalty of 100% of the difference of the tax assessed and the tax paid as per return may be imposed (U/s 117-F(1))
3) Interest @ 1% mensem of such amount for the entire period of default may be imposed (Sec 117-F(2)
4) Rule 286 – When a person or employer fails to pay the half-yearly tax within the periods prescribed under rules 277 and 278, the Commissioner shall levy interest at the rate of one percent simple interest per month of the amount unpaid for the entire period of default and the interest shall be levied on the first day of the month.
5) Failure to obtain certificate of enrollment/registration: Liable to such consequences as the appropriate authority may deem fit
Conclusion
The Tamil Nadu Urban Local Bodies Act, 1998 serves as the cornerstone of urban governance in the state. By consolidating municipal laws, it provides a uniform framework for effective delivery of essential services, local development, and citizen participation in governance. Its enforcement not only strengthens decentralization but also ensures that urban local bodies function as self-reliant institutions of local government, accountable to the people they serve.
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