Professional Tax

Overview

What is Professional Tax?

Professional Tax (PT) is a state-level tax levied on individuals earning income through employment, profession, trade, or calling. It is governed by Article 276 of the Indian Constitution, which empowers state governments to levy this tax.

The maximum amount of professional tax that can be levied is ₹2,500 per year. It is deductible under Section 16(iii) of the Income Tax Act, 1961, providing a tax benefit to employees.

State-level tax levied under Article 276 of the Indian Constitution

Maximum amount capped at ₹2,500 per year across all states

Fully deductible under Section 16(iii) of the Income Tax Act, 1961

Employer must register and obtain Registration Certificate (RC)

Applicable in 18+ states including Maharashtra, Karnataka, West Bengal, and Tamil Nadu

Automate Professional Tax with ConfluxHR

Auto-calculate state-wise PT, deduct from payroll, and file returns without manual effort.

Get Started

Explore Other Compliances

PF Act ESI Act Maternity Benefits Act Safety, Health & Working Act Form 12BB

FAQ

Frequently Asked Questions

Everything you need to know about Professional Tax compliance.

Professional Tax is currently applicable in Maharashtra, Karnataka, West Bengal, Tamil Nadu, Andhra Pradesh, Telangana, Gujarat, Madhya Pradesh, Assam, Kerala, Meghalaya, Odisha, Sikkim, Tripura, and a few others. States like Delhi, Rajasthan, Uttar Pradesh, and Haryana do not levy Professional Tax.

Maharashtra: Up to ₹7,500 — Nil | ₹7,501–₹10,000 — ₹175/mo | Above ₹10,000 — ₹200/mo (₹300 in Feb)
Karnataka: Up to ₹15,000 — Nil | ₹15,001–₹35,000 — ₹150/mo | Above ₹75,000 — ₹200/mo
West Bengal: Up to ₹10,000 — Nil | ₹10,001–₹15,000 — ₹110/mo | Above ₹40,000 — ₹200/mo
Tamil Nadu: Up to ₹21,000 — Nil | ₹21,001–₹30,000 — ₹135/mo | Above ₹75,000 — ₹810/mo
Andhra Pradesh & Telangana: Up to ₹15,000 — Nil | Above ₹20,000 — ₹200/mo

Register with the state's Professional Tax authority within 30 days of becoming liable
Obtain a Registration Certificate (RC) for deducting PT from employees
Obtain an Enrollment Certificate (EC) for employer's own PT liability
Deduct PT from employee salaries as per applicable state slab rates
Deposit the collected PT with the state government within the prescribed due date
File monthly, quarterly, or annual returns as required by the respective state

Yes. Professional Tax paid by an employee is fully deductible under Section 16(iii) of the Income Tax Act, 1961. This means the amount of PT paid is reduced from the gross salary before computing taxable income, providing a direct tax benefit to the employee.

Parents of children with permanent disability or mental retardation
Members of the armed forces (Central Government employees)
Individuals above 65 years of age (in some states)
Persons with permanent physical disability (in some states)
Women exclusively engaged as agents under Mahila Pradhan Kshetriya Bachat Yojana
Badli workers in the textile industry (in some states)

Due dates vary by state. In Maharashtra, PT must be paid by the last day of the month following the month of deduction. In Karnataka, it is due by the 20th of the following month. Employers operating in multiple states must track each state's specific due dates separately.

Late registration: Penalty up to ₹5 per day of delay
Non-deduction or non-payment: Interest at 1.25% per month on unpaid amount
Late payment: Penalty up to 10% of the tax amount
Non-filing of returns: Fine up to ₹1,000 per return

ConfluxHR automatically identifies the applicable state for each employee, applies the correct PT slab, deducts the right amount from payroll every month, and tracks payment due dates. It generates state-wise PT reports and return summaries, eliminating manual calculations and reducing the risk of penalties.