Professional Tax (PT)
A professional tax is a direct tax levied by the government on employees and professionals. It is a source of revenue for state governments, which helps fund schemes for the welfare and development of the region.
Professional tax is a state tax, so tax rates vary from state to state. Like income tax, professional tax is linked to income slabs and is deducted at source by the employer. It's a nominal tax that never exceeds a few hundred rupees a month — the maximum any state can impose is ₹2,500. The total amount of Professional Tax paid during the year is allowed as a deduction under the Income Tax Act.
Below are dedicated state-wise pages with state-specific information and references. We recommend checking each state's page for detailed information, including slab rates.
State-wise Professional Tax Acts
Each state has passed its own Professional Tax Act with local compliances. These acts are also amended from time to time. Check the specifics by clicking on one of the states shown below.
States Where Professional Tax is Not Applicable
Professional tax is not applicable in the following states/UTs:
- Andaman and Nicobar Islands
- Arunachal Pradesh
- Chandigarh
- Dadra and Nagar Haveli
- Daman and Diu
- Delhi
- Goa
- Haryana
- Himachal Pradesh
- Ladakh
- Lakshadweep
- Rajasthan
- Uttaranchal
- Uttar Pradesh
Applicability
Professional tax applies to employees (wage earners) across almost all industries. It also applies to professionals like doctors, chartered accountants, consultants, traders, and other self-employed individuals.
Beyond individuals, professional tax applies to various other "persons," a term with a broad legal definition that extends to organisations and groups such as:
- Corporations
- Companies
- Branch offices of companies
- Co-operative societies
- Clubs and associations
- Hindu Undivided Family (HUF)
Who is Exempted From Professional Tax?
The Professional Tax Rules provide exemptions for specific individuals. The following are exempt from paying professional tax:
- Parents of children with a permanent or mental disability
- Members of the forces as defined in the Army Act 1950, the Air Force Act 1950, and the Navy Act 1957, including auxiliary forces or reservists serving the state
- Badli workers in the textile industry
- Individuals with a permanent physical disability, including blindness
- Women exclusively engaged as an agent under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings
- Parents or guardians of individuals with a mental disability
- Individuals above 65 years of age
Even non-exempt "persons" often don't have to pay professional tax if their income falls below a certain threshold. This is a broad list of exemptions; refer to the individual state pages below for specifics.
Who is Responsible for Deducting Professional Tax?
The employer is responsible for registering, deducting, and paying professional tax to the government regularly for employees and wage earners. Failure to comply carries consequences like fines and penal tax.
Self-employed professionals are personally responsible for paying their own professional tax. They must first enrol and obtain a Certificate of Enrollment from the tax department.
Consequences
Failure to register: The person or company is liable to a penalty for the period they remain unregistered.
Failure to deposit, or late deposit: Liable to a penalty for the delay period.
Non-deposit of amount: Officials can recover the amount, along with applicable penalty and interest, from the defaulter's assets, and can attach their bank account. In severe cases, defaulters can be prosecuted.