—Guide
Professional Tax in India: Which States Levy It and How Employers Comply
What Professional Tax is, which states levy it, how deduction and payment work for employers, the ₹2,500 cap, and how to handle employees spread across several states.
Professional Tax is a state tax on professions, trades and employment. Not every state levies it, and those that do set their own slabs, forms and due dates. For employers with staff in several states, keeping track takes care.
The Constitutional Cap
Article 276 of the Constitution allows states to levy tax on professions, trades, callings and employments, up to ₹2,500 per person per year.
Which States Levy It
States levying Professional Tax include Telangana, Andhra Pradesh, Karnataka, Maharashtra, Tamil Nadu, Kerala, West Bengal, Gujarat, Madhya Pradesh, Odisha, Assam and several others. States including Delhi, Uttar Pradesh, Haryana and Rajasthan don't levy it on employees. Always check the current position for each state where you employ people.
What Employers Do
- Register as an employer in each state where you have employees.
- Deduct PT from salaries at the state's slab rates.
- Pay the deducted amount by the state's due date.
- File returns as required, monthly or annually.
The Business's Own PT
In many states, companies, firms and professionals must also enrol and pay annual PT for themselves, separate from the employer registration. This is often overlooked.
Multi-state Employers
- PT follows where the employee works, not where the company is registered.
- Remote employees can create obligations in their home state.
- Payroll must apply each state's slabs.
Consequences of Non-compliance
States charge interest and penalties for late registration, late payment and failure to deduct. Employers who deduct and don't pay face greater liability.
Getting Help
Think Filing handles Professional Tax registration and compliance across states.