Professional tax is a state-level tax on professions, trades and employment. The Constitution caps it at ₹2,500 per person per year. It is levied by states such as Maharashtra, Gujarat, Karnataka, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu and Kerala, and not levied in Delhi, Haryana, Uttar Pradesh, Rajasthan, Uttarakhand or Himachal Pradesh. In states that levy it, the employer deducts it from salary according to the state's slabs and pays it to the state or local authority.
What professional tax is
Professional tax (PT) is a tax that a state may levy on people who earn from a profession, trade, calling or employment. Article 276 of the Constitution allows states to charge it and sets the maximum at ₹2,500 per person per year.
For salaried employees, the employer deducts PT from salary and pays it to the government. Business owners, professionals and companies usually have to pay PT for themselves as well. The amount an employee pays is allowed as a deduction from salary income under the income-tax law.
Which states levy professional tax
| Professional tax | States and territories |
|---|---|
| Levied | Maharashtra, Gujarat, Karnataka, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, Madhya Pradesh, Bihar, Odisha, Assam, Jharkhand and Punjab, among others |
| Not levied | Delhi, Haryana, Uttar Pradesh, Rajasthan, Uttarakhand and Himachal Pradesh |
This list covers the larger states and is not complete. Some north-eastern states and union territories also levy PT. If your state is not listed, check with its commercial tax or local body office.
Slabs differ by state and change
Each state sets its own slabs: the salary level below which no PT is due, and the amount for each salary band. We do not publish slab tables here because states revise them and an old table causes wrong deductions.
- Most states collect PT monthly, with a slightly different amount in one month of the year so that the total stays within the annual cap.
- In some states, such as Tamil Nadu and Kerala, PT is collected by the local body (corporation, municipality or panchayat), usually on a half-yearly basis.
- Some states have different slabs or exemptions for particular groups, such as women, senior citizens or persons with disabilities.
For the current slab, check the website of your state's commercial tax or professional tax department, or your local body.
What the employer must do
- Register as an employer under the state's professional tax law. Many states have two registrations: one for deducting PT from employees and one for the business's own PT.
- Deduct PT from each employee's salary according to the current slab.
- Pay the amount deducted to the state or local body by the due date, and file the return in the form and frequency the state prescribes.
- Show the deduction on the payslip. See what a salary slip should show.
PT follows the place of work. A company with staff in several states applies each state's rules to the employees working there, and no PT for those working in a state that does not levy it.
How FundRaksha HR handles professional tax
On the Pro and Enterprise plans, FundRaksha HR has state professional tax slabs ready for Telangana, Andhra Pradesh, Maharashtra, Gujarat and West Bengal, deducts PT in payroll and prepares a PT file each month. If your team works in another state, ask us during the free trial how PT will be handled.
Frequently asked questions
What is the maximum professional tax in a year?
₹2,500 per person per year. This cap is set by Article 276 of the Constitution and applies in every state.
Is professional tax applicable in Delhi, Haryana or Uttar Pradesh?
No. Delhi, Haryana, Uttar Pradesh, Rajasthan, Uttarakhand and Himachal Pradesh do not levy professional tax.
Who pays professional tax, the employer or the employee?
The employee bears it. The employer deducts it from salary and pays it to the state or local authority. Businesses and professionals usually also pay PT for themselves.
Is professional tax the same in every state?
No. Each state sets its own slabs and due dates, within the ₹2,500 annual cap. Slabs change, so check the state department's current notification.
Our office is in one state and some employees work in another. Which state's PT applies?
Generally the state where the employee works. Apply each state's rules to the employees working there.
This guide is general information for Indian employers, not legal or tax advice. Rates and rules change; confirm the current position with EPFO, ESIC, your state department or your consultant before acting.
Related guides
Attendance and payroll software in your city: Ahmedabad, Surat, Rajkot, Vadodara, Mumbai, Pune, Delhi, Noida, Gurugram, Faridabad, Ludhiana, Jaipur, Indore, Hyderabad, Bengaluru, Chennai, Coimbatore, Kolkata, Lucknow, Kochi