Professional Tax
A tax on employment levied by individual state governments — charged by some states and not by others.
Professional tax is levied by state governments on income earned by way of profession, trade, calling or employment. The employer deducts it from salary and remits it to the state. It is a state subject, which is the single most important thing about it: there is no national rate, no national slab and no national due date.
Some states levy it and some do not. Among those that do, the slabs, the amounts and the remittance schedule all differ. An employer operating in several states is therefore running several different professional tax regimes at once, and the correct treatment for an employee depends on where they work rather than where the company is headquartered.
The Constitution caps the total professional tax a state may levy on one person in a year, which is why the amounts are small relative to income tax. Being small does not make it optional: non-deduction is an employer default, and the penalties attach to the employer rather than the employee.
For a multi-state employer this is usually the statutory item most likely to be got wrong, precisely because it looks minor and varies in a way the central levies do not.
Key figures
| Item | Value | As of |
|---|---|---|
| Constitutional annual cap per person | ₹2,500 | Article 276(2) |
Ceilings, thresholds and rates change by notification. Check the current position before relying on a figure.
What varies
State. Rates, slabs, remittance dates and whether the tax exists at all are all set per state.
Also called: pt, ptax, profession tax.
This is a description of the law as it stands, not legal advice. Back to the glossary.
In the product
Statutory Compliance
PF, ESI, PT, TDS and the Labour Codes, handled.
- PF and ESI contributions, ECR generation and return filing support
- Professional Tax applied per state, including states that do not levy it
- TDS with Form 24Q and annual Form 16 issue