Professional Tax, state by state: a small firm’s quick guide
Professional tax trips up firms that operate across states, because it is not one tax — it is a different rule in every state that levies it, and some do not levy it at all.
Professional tax is the small line on a payslip that causes an outsized amount of confusion, because unlike income tax or GST it is not a single national rule. It is a state tax — each state that levies it has its own Act, slabs and due dates, and several do not levy it at all.
The one number that is the same everywhere
The Constitution caps professional tax at Rs 2,500 per person per year (Article 276). No state can charge more. It is deducted by the employer from salary and paid to the state.
Which states levy it, and which do not
States that do levy it include Maharashtra, Karnataka, West Bengal, Tamil Nadu, Andhra Pradesh, Telangana, Gujarat, Madhya Pradesh and Kerala.
States and territories that do not include Delhi, Uttar Pradesh, Haryana, Rajasthan and most union territories. One to watch: Punjab charges a Punjab State Development Tax of Rs 200 a month — a professional-tax equivalent in all but name.
What this means if you hire across states
The moment your firm has people in more than one state, professional tax becomes several obligations, each with its own registration and slabs. If everyone sits in one state, it is a single deduction; if not, treat each state as its own small obligation.
Professional tax, in short
- A state tax, capped at Rs 2,500/year per person (Article 276)
- Levied by Maharashtra, Karnataka, WB, TN, AP, Telangana, Gujarat, MP, Kerala and others
- Not levied by Delhi, UP, Haryana, Rajasthan and most UTs (Punjab has a PT-equivalent)
- Deducted from salary; slabs and due dates vary by state
General awareness only, accurate to the best of our research as of August 2026 — not tax or legal advice. Slabs, exemptions and due dates are set by each state and change; some states assess it at the municipal level. Confirm your state’s rules on the relevant portal or with your CA.
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