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Labour Law & Compliance · Glossary

Professional Tax (PT)

Also called: PT, profession tax, P.Tax

Definition

Professional tax is a state-level tax on income from employment, profession or trade, capped by Article 276 of the Constitution at ₹2,500 per person per year. Employers in states that levy it must register, deduct the slab amount from each employee's monthly salary and remit it on the state's schedule. Several states, including Delhi, Haryana and Uttar Pradesh, do not levy it at all.

Which states levy it and which do not

Professional tax exists in Maharashtra, Karnataka, Telangana, Andhra Pradesh, West Bengal, Gujarat, Madhya Pradesh, Tamil Nadu and a number of other states, each with its own slabs, forms and due dates. Delhi, Haryana, Uttar Pradesh, Rajasthan, Uttarakhand, Himachal Pradesh and Goa (as a state levy) have no professional tax.

A company with branches in several states deducts PT according to the state where each employee works, not the registered-office state. Multi-state security agencies and facility managers need a PT slab per state in the payroll master.

Slab examples

Maharashtra: nil up to ₹7,500 monthly gross; ₹175 for ₹7,501–10,000; ₹200 per month above ₹10,000 with ₹300 in February; women are exempt up to ₹25,000. Karnataka: nil up to ₹25,000; ₹200 per month above (₹300 in February) since the 2025 revision. Telangana and Andhra Pradesh: nil up to ₹15,000; ₹150 for ₹15,001–20,000; ₹200 above ₹20,000.

West Bengal: nil up to ₹10,000; ₹110 for ₹10,001–15,000; ₹130 for ₹15,001–25,000; ₹150 for ₹25,001–40,000; ₹200 above ₹40,000. Gujarat: nil up to ₹12,000; ₹200 above. Madhya Pradesh: nil up to ₹18,750; ₹125 for ₹18,751–25,000; ₹167 for ₹25,001–33,333; ₹208 above (₹212 in the last month). Tamil Nadu levies half-yearly through local bodies with slabs that vary by corporation. Always confirm the current schedule with the state commercial tax department.

  • Constitutional cap: ₹2,500 per year per person
  • Slabs apply on monthly gross salary in most states
  • February (or the last month) often carries a higher amount to reach the annual total
  • Slabs change; review them whenever a state budget is passed

Employer obligations

The employer must obtain a registration certificate as a deductor (Maharashtra calls it PTRC) and usually an enrolment certificate for the company itself (PTEC). Each month the slab amount is deducted from salary and shown on the payslip, and the total is remitted with a return on the state's timeline, which can be monthly or annual depending on the state and the size of the liability.

Failure to deduct does not shift the liability to the employee; the employer remains liable for the tax plus interest and penalty.

PT for a Mumbai office across a year

An employee earning ₹28,000 gross in Mumbai falls in the top Maharashtra slab: ₹200 per month for eleven months and ₹300 in February, totalling ₹2,500 for the year, which is exactly the constitutional maximum. A female colleague earning ₹24,000 pays nothing because women are exempt up to ₹25,000 in Maharashtra. If the same company opens a Gurugram branch, employees there pay no PT because Haryana does not levy it.

How Attend Mitra handles this

Attend Mitra's payroll settings support professional tax as a per-employee or per-branch deduction so that the slab for each state appears on the payslip and salary register; the return is filed by the employer with the state department.

Frequently asked questions

Which states do not have professional tax?
Delhi, Haryana, Uttar Pradesh, Rajasthan, Uttarakhand, Himachal Pradesh and Goa (no state levy), among others. States that do levy it include Maharashtra, Karnataka, Telangana, Andhra Pradesh, West Bengal, Gujarat, Madhya Pradesh and Tamil Nadu. Check with the state commercial tax department for the current position.
What is the maximum professional tax in India?
₹2,500 per person per year, fixed by Article 276 of the Constitution. States structure their monthly slabs so the annual total for the top slab reaches ₹2,500, often by charging ₹300 instead of ₹200 in February.
Is professional tax deducted on gross or basic?
Most states apply slabs to monthly gross salary or wages. The exact base and any exemptions (such as Maharashtra's exemption for women earning up to ₹25,000) are set in the state's Act and schedule.
Who pays professional tax, employer or employee?
The employee bears it as a salary deduction, but the employer is responsible for registering, deducting, remitting and filing. If the employer fails to deduct, the department recovers the tax with interest and penalty from the employer, not the employee.

Related terms

Net Salary (Take-Home)
Net salary is the amount credited to an employee's bank account after all deductions are taken from gross salary: employee EPF, ESI, professional tax, TDS, Labour Welfare Fund, loan or advance recoveries and any LOP already reflected in gross. It is the figure employees mean when they ask about their in-hand salary.
Gross Salary
Gross salary is the total of all earnings an employee is paid for a period before any deductions: basic, dearness allowance, HRA, other allowances, overtime, incentives and arrears. It excludes employer contributions such as employer EPF and gratuity provisions, which belong to CTC, and it is the base on which ESI coverage and contribution are determined.
TDS on Salary (Section 192)
TDS on salary is the income tax an employer must deduct every month under section 192 of the Income-tax Act, based on the employee's estimated annual taxable salary and chosen tax regime. The deducted amount is deposited by the 7th of the following month (30 April for March), reported quarterly in Form 24Q, and certified to the employee in Form 16 by 15 June.
Labour Welfare Fund (LWF)
Labour Welfare Fund (LWF) is a statutory fund set up under individual state Acts to finance housing, medical, educational and recreational schemes for workers. In states that have one, employers deduct a small fixed contribution from eligible employees, add the employer's share, and remit both to the state Labour Welfare Board on a half-yearly or annual schedule fixed by that state.
Salary Slip (Payslip)
A salary slip, or payslip, is the statement an employer gives each employee for a pay period showing paid days, earnings by component, deductions by component and net pay, along with identifiers such as UAN, ESI number and PAN. Under the Code on Wages every employer must issue a wage slip, and a PDF sent through an employee app meets the requirement where the rules permit electronic form.
‘Wages’ Definition and the 50% Rule
Under the four Labour Codes, ‘wages’ means basic pay, dearness allowance and retaining allowance, and these must together be at least 50% of an employee's total remuneration. If excluded allowances such as HRA, conveyance and bonus exceed 50%, the excess is added back to wages. This single definition now drives EPF, gratuity, bonus and overtime calculations across India.

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Professional tax calculatorProfessional tax slabs state-wisePayroll compliance checklistPayroll software Mumbai

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