What is professional tax?
Professional tax (PT) is a tax levied by state governments on salaried employees, professionals and traders under Article 276 of the Constitution, which caps it at ₹2,500 per person per year. Employers must deduct PT from salaries every month according to the slab notified by the state where the employee works and deposit it with the state treasury. Not every state levies it — Rajasthan, Delhi, Uttar Pradesh, Haryana, Uttarakhand, Himachal Pradesh and Goa have no professional tax on salaries.
How slabs work
- Monthly-slab states (Maharashtra, Karnataka, West Bengal, Gujarat, AP, Telangana, MP, Assam, Punjab, Sikkim, Tripura, Mizoram, Meghalaya, Nagaland): tax depends on monthly gross; the top slab is ₹200, and in Maharashtra, MP and Assam the February deduction is higher (₹300 / ₹212) so the year totals ₹2,500.
- Half-yearly states (Tamil Nadu, Kerala, Puducherry): tax is fixed per six-month salary band and collected twice a year or spread monthly.
- Annual-slab states (Bihar, Jharkhand, Odisha, Chhattisgarh, Manipur): tax depends on annual salary.
Worked example
A male employee in Maharashtra with gross ₹30,000 per month falls in the top slab: ₹200 is deducted in each month from March to January and ₹300 in February, totalling ₹2,500 for the year. A woman earning up to ₹25,000 in Maharashtra pays nothing. In Karnataka the same ₹30,000 salary attracts ₹200 per month (₹2,400 a year), while anyone below ₹25,000 is exempt. Enter the number of employees to see the total PT liability for the payroll.
Compliance notes
Employers need a PT Registration Certificate (PTRC) to deduct from staff and a PT Enrolment Certificate (PTEC) for the business itself. Returns are monthly or annual depending on the state and liability. Employees under the old income-tax regime can deduct PT paid under Section 16(iii).
Keeping the slab table current
States revise slabs in their annual finance bills, so verify the figures against the latest notification each April and after a state budget; the tool's slab table is maintained at the top of its code for easy yearly updates.
Frequently Asked Questions
Is professional tax applicable in Rajasthan?
No. Rajasthan does not levy professional tax on salaried employees, so no PT deduction is needed in payroll for staff working in the state.
What is the maximum professional tax?
₹2,500 per year, fixed by Article 276(2) of the Constitution. States structure their slabs so that the annual total does not exceed this.
Which state does PT depend on — company location or employee location?
The state where the employee actually works. A company registered in Delhi with staff in Mumbai must deduct Maharashtra PT for those employees.
Can I claim professional tax in income tax?
Yes, under the old regime PT actually paid is deductible from salary income under Section 16(iii). The new regime does not allow this deduction.
Disclaimer: This tool is for general information and estimation only. Tax rates and rules change — verify with official sources or a professional before acting. Read full disclaimer.