What professional tax is
Professional tax is a tax on "professions, trades, callings and employments" levied by a State, or by a local body under state law. Article 276(2) of the Constitution caps the total that any one person can be charged in a year at ₹2,500. Within that cap each state sets its own slabs, due dates, forms and penalties, which is why a company with staff in five states runs five professional tax computations.
For salaried employees the employer deducts the tax from pay and pays it to the state. The employer is also liable in its own right: companies, firms, partners, directors and professionals pay an annual amount under separate entries in most state schedules. Gujarat's Act, for example, makes the employer liable to pay the tax on behalf of the employee even if it failed to deduct it.
Not every state levies the tax; confirm for each location before setting up payroll.
Salary slabs in major states
The table shows the slab for salary and wage earners as published by each state's tax department or, for Tamil Nadu, the local body. Only states whose current schedule we could read on an official site are listed. Monthly figures are per employee.
| State | Salary slab and tax | Official source |
|---|---|---|
| Maharashtra | Men: up to ₹7,500 nil; ₹7,501 to ₹10,000: ₹175 a month; above ₹10,000: ₹2,500 a year (₹200 a month, ₹300 in February). Women: up to ₹25,000 nil; above ₹25,000: ₹2,500 a year as for men. From 1 April 2023. | Maharashtra GST Department rate schedule, updated to 31 March 2025 |
| Karnataka | Below ₹25,000 a month: nil. ₹25,000 and above: ₹200 a month, and ₹300 for February from 1 April 2025, making ₹2,500 a year | Karnataka Commercial Taxes Department (ptax.karnataka.gov.in); Karnataka Act 33 of 2025, Gazette notification DPAL 08 SHASANA 2025 of 15 April 2025 |
| West Bengal | Up to ₹10,000 a month: nil; ₹10,001 to ₹15,000: ₹110; ₹15,001 to ₹25,000: ₹130; ₹25,001 to ₹40,000: ₹150; above ₹40,000: ₹200 a month. From 1 April 2014. | West Bengal Directorate of Commercial Taxes, schedule under Notification 440-L of 11 March 2014 |
| Tamil Nadu (Greater Chennai Corporation) | Half-yearly gross income: up to ₹21,000 nil; ₹21,001 to ₹30,000: ₹180; ₹30,001 to ₹45,000: ₹425; ₹45,001 to ₹60,000: ₹930; ₹60,001 to ₹75,000: ₹1,025; above ₹75,000: ₹1,250 per half-year (from the second half of 2024-25) | Greater Chennai Corporation press release, 4 August 2026; other local bodies set their own rates |
| Gujarat | Up to ₹12,000 a month: nil; above ₹12,000: ₹200 a month. From 1 April 2022. | Gujarat Commercial Tax rate schedule |
| Telangana | Up to ₹15,000 a month: nil; ₹15,001 to ₹20,000: ₹150 a month; above ₹20,000: ₹200 a month | Telangana Commercial Taxes, First Schedule, entry 1 |
Two practical points from the schedules. Gujarat's schedule reduces the month's tax proportionately when a person stops being a salary earner part way through a month. In Tamil Nadu, the Greater Chennai Corporation collects through the pay bills for August and January, with the first half-year's tax due by 30 September with the return in Form 14.
Registration: PTRC and PTEC
Maharashtra uses two certificates, and the terms are now used loosely elsewhere:
- PTRC (registration certificate): held by an employer liable to deduct tax from employees' salaries. It is the employer's account for the monthly or annual returns and payments of tax deducted.
- PTEC (enrolment certificate): held by a person liable to pay professional tax on its own account, such as a company, LLP, partner, director or professional. The Maharashtra schedule charges ₹2,500 a year for most of these.
Karnataka, Telangana and Gujarat have equivalent registration and enrolment for employers and for persons liable on their own account, under their own names and forms. Register in each state where you have an establishment with staff; due dates for payment and returns differ by state and, in some states, by the size of the previous year's liability, so take them from the state portal and put them on your compliance calendar.
Worked example
Round illustrative numbers. ABC Infra Private Limited has five employees in four states, each on a steady monthly salary for the whole year.
| Employee and state | Monthly salary (₹) | Working | Tax for the year (₹) |
|---|---|---|---|
| A, Maharashtra (man) | 40,000 | 200 × 11 + 300 (February) | 2,500 |
| B, Maharashtra (woman) | 22,000 | At or below ₹25,000 | Nil |
| C, Telangana | 18,000 | 150 × 12 | 1,800 |
| D, Gujarat | 15,000 | 200 × 12 | 2,400 |
| E, Chennai | 40,000 | Half-yearly gross ₹2,40,000, above ₹75,000: 1,250 × 2 | 2,500 |
Employee B pays nothing although she earns more than employee D, because Maharashtra's threshold for women is ₹25,000. Employee E pays twice a year, not monthly. The professional tax calculator applies these slabs month by month.
Payroll practice
- State follows the workplace. Map every employee to the state of the establishment where they work. A transfer mid-year changes the state from the month of transfer.
- Salary for the slab. Most schedules use monthly salary or wages; check whether your state uses gross pay or a defined salary, and how it treats arrears and bonus.
- Exits. Deduct for the final month under the state's rule; see the full and final settlement checklist.
- Exemptions. States exempt some classes, such as persons with specified disabilities or senior citizens; read the exemption section of each Act rather than assuming.
- Own enrolment. Directors and the company itself may owe ₹2,500 a year under separate entries. These are often missed in the first year of a new state.
K-HR records each employee's PT and LWF state and puts PT due dates by state on its compliance calendar, with an owner and filed status; K-Finance payroll works out the deduction. The slabs above are as published on the dates shown; confirm the current schedule on the state portal before you rely on it.
Common questions
What is the maximum professional tax per year?
₹2,500 per person per year. Article 276(2) of the Constitution caps the total tax payable by any one person to a State or local authority on professions, trades, callings and employments at ₹2,500 a year.
Why is professional tax ₹300 in February in Maharashtra?
The Maharashtra schedule fixes ₹2,500 a year for the top slab, payable as ₹200 a month for eleven months and ₹300 in February, so the year totals exactly the constitutional cap.
What is the difference between PTRC and PTEC?
In Maharashtra a PTRC (registration certificate) is held by an employer to deduct professional tax from salaries and pay it to the state. A PTEC (enrolment certificate) is held by a company, firm, director, partner or professional to pay its own professional tax. Most employers need both.
Which state's professional tax applies to a remote employee?
Generally the state where the employee works and the employer has its establishment, not the state where the company is registered. For staff who work from home in another state, check that state's Act and register there if it levies the tax.
Is professional tax deductible for income tax?
Yes. Professional tax paid on employment is deducted from salary income under the Income-tax Act 2025 (previously s.16(iii) of the 1961 Act); the employee claims it in the return and it appears on Form 130. Confirm the current section reference with your CA.
Sources
- Maharashtra GST Department: Rate schedules under the Professions Tax Act 1975 (rates from 1 April 2023)
- West Bengal Directorate of Commercial Taxes: profession tax schedule from 1 April 2014
- Gujarat Commercial Tax: Rate of Profession Tax (from 1 April 2022)
- Telangana Commercial Taxes: Profession Tax First Schedule
- Greater Chennai Corporation: press release R.D. PT C.No/3555/2026 dated 4 August 2026 (half-yearly profession tax)
- Karnataka Commercial Taxes Department: profession tax slab (₹25,000 and above: ₹200 a month)
- Karnataka Gazette: Act 33 of 2025, notification DPAL 08 SHASANA 2025 of 15 April 2025 (₹300 for February)
- Constitution of India, Article 276 (Legislative Department)