Professional tax is a state tax on professions, trades, callings and employment, levied under Article 276 of the Constitution and capped at Rs 2,500 per person per year. In states that levy it, employers obtain a registration to deduct and deposit tax from salaries (often called PTRC), and businesses and professionals obtain an enrolment to pay their own tax (PTEC).
States that levy professional tax
States such as Maharashtra, Karnataka, West Bengal, Tamil Nadu, Andhra Pradesh, Telangana, Gujarat and several others levy professional tax. Slabs and due dates differ by state.
Employer obligations
- Register within the time prescribed after employing staff.
- Deduct tax from salaries per state slabs.
- Deposit and file returns monthly, quarterly or annually as per state rules.
Enrolment for businesses and professionals
Companies, firms, proprietors and professionals pay their own annual professional tax under a separate enrolment certificate in many states.
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Get expert help →Penalties
Late registration, deduction or payment attracts interest and penalties under the state Act.
Frequently asked questions
Is professional tax deductible for income tax?
Yes. Professional tax paid is allowed as a deduction from salary income under Section 16, and as a business expense for businesses.
Is professional tax applicable in Delhi?
Delhi does not levy professional tax. Applicability depends on where the employee works or the business operates.
Do I need separate registrations for each branch?
Registration is state-specific. Branches in different states levying professional tax require registration in each state.
Are there exemptions?
States exempt certain categories, such as persons with disabilities, senior citizens or employees below a salary threshold, as per their Acts.
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