Professional tax (PT) is a state-level tax on income from employment, profession, trade or calling, capped at Rs 2,500 per person per year under Article 276(2) of the Constitution. Employers deduct it monthly from salaries and remit it; self-employed people pay it directly. It applies only in states that have enacted a PT Act — Delhi, UP, Haryana, Rajasthan, Punjab and most others do not levy it. PT paid is fully deductible from salary under Section 16(iii).
Under the Karnataka Professional Tax (Amendment) Act, 2025 (Act 33 of 2025), the exemption threshold rose from Rs 15,000 to Rs 25,000 per month and the annual cap from Rs 2,400 to Rs 2,500, effective 1 April 2025. Salaries up to Rs 25,000/month now pay nil PT in Karnataka.
Professional Tax Slabs FY 2025-26 (Key States)
Slabs are set by each state and revised from time to time. Below are the widely used monthly salary slabs for major states — always confirm the current figure on the official state portal before deducting.
| State / UT | Monthly salary | PT / month | Max / year |
|---|---|---|---|
| Maharashtra | Rs 7,501 – 10,000 | Rs 175 | Rs 2,500 |
| Maharashtra | Above Rs 10,000 | Rs 200 (Rs 300 in Feb) | Rs 2,500 |
| Karnataka | Up to Rs 25,000 | Nil | — |
| Karnataka | Above Rs 25,000 | Rs 200 (Rs 300 in Feb) | Rs 2,500 |
| West Bengal | Rs 10,001 – 15,000 | Rs 110 | Rs 2,500 |
| West Bengal | Above Rs 25,000 | Rs 200 | Rs 2,500 |
| Tamil Nadu | Rs 21,001 – 30,000 (half-yearly) | Rs 100 | Rs 2,500 |
| Andhra / Telangana | Rs 15,001 – 20,000 | Rs 150 | Rs 2,500 |
| Andhra / Telangana | Above Rs 20,000 | Rs 200 | Rs 2,500 |
| Gujarat | Above Rs 12,000 | Rs 200 | Rs 2,500 |
| Madhya Pradesh | Above Rs 18,750 | Rs 208 | Rs 2,500 |
Slabs simplified for the higher brackets; several states have nil slabs for lower salaries. Women and some categories are exempt in certain states (e.g. Maharashtra exempts women up to Rs 25,000/month). Figures for FY 2025-26 — verify on the state portal.
States & UTs That Do NOT Levy Professional Tax
Professional tax exists only where a state has passed its own PT Act. The following major states and union territories currently levy no professional tax, so no deduction or registration is needed there:
- Delhi, Uttar Pradesh, Haryana, Rajasthan, Punjab
- Uttarakhand, Himachal Pradesh, Jammu & Kashmir, Chandigarh
- Most North-Eastern states (Assam, Meghalaya, Tripura, Manipur and Sikkim do levy it)
- Union territories such as Andaman & Nicobar, Dadra & Nagar Haveli, Lakshadweep
PT liability follows the state where the employee actually works, not the head-office state. A company with staff across states may need separate PTEC/PTRC registrations in each PT-levying state and none in the no-PT states. Multi-state payroll is where most PT non-compliance arises.
Running payroll across multiple states? Get your PT registrations mapped.
Talk to a TaxClue Expert →How to Register for Professional Tax
Registration is on the state PT portal and is usually of two kinds — one for the entity's own liability and one for deducting from employees:
| Certificate | For whom | Purpose |
|---|---|---|
| PTEC (Enrolment Certificate) | Business / self-employed | Pay PT on the entity's / individual's own account |
| PTRC (Registration Certificate) | Employers with staff | Deduct PT from employee salaries and remit it |
Many employers need BOTH — PTEC for the company and PTRC to deduct from staff. Register within ~30 days of becoming liable (first hire / start of profession).
- 1Open state portale.g. mahagst.gov.in (Maharashtra)
- 2Fill applicationPAN, address, employee & salary details
- 3Upload proofsPAN, address proof, incorporation, salary register
- 4Pay & submitNominal fee; some states charge nil
- 5Get PTEC/PTRCCertificate issued, usually 7–15 days
How to Pay & File Professional Tax
Employers deduct PT from each month's salary and remit it to the state — monthly or half-yearly depending on state rules and headcount. The typical cycle:
- Log in to the state PT portal
- Select the return period (monthly / half-yearly)
- Enter employee count and salary-wise PT
- Generate the challan and pay online
- Download the receipt and keep records
- File the periodic PT return where required
Want us to run PT deduction, payment and returns for your payroll?
Get PT Compliance Help →Penalties for Non-Payment of Professional Tax
Penalties vary by state PT Act but broadly cover late registration, late payment and non-deduction. Common consequences:
- Interest on late payment — typically 1%–2% per month (Maharashtra: 1.25%/month).
- Penalty for late registration — a fixed daily/one-time amount, or a multiple of the tax in some states.
- Non-deduction by employer — the employer is liable for the tax plus interest and penalty; the employee is not personally penalised.
- Prosecution — persistent default can attract prosecution under the state PT Act.
Professional tax actually paid in the year is fully deductible from salary income under Section 16(iii) of the Income-tax Act (old regime). Self-employed persons claim it as a business expense under Section 37. Note that Section 16 deductions are not available in the default new regime except the standard deduction of Rs 75,000.
For how PT sits within your overall salary tax, see our guides on income-tax slabs and TDS on salary.
- Constitutional cap: Article 276(2), Constitution of India
- Income-tax deduction: Section 16(iii), Income-tax Act 1961
- Karnataka: Professional Tax (Amendment) Act, 2025 (Act 33/2025, w.e.f. 1 Apr 2025)
- Maharashtra PT portal: mahagst.gov.in
- Verify current slabs on the respective state PT / commercial-taxes portal
Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position with the official source before you act on it.