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Professional tax in India depends on the employee’s state, salary and local rules. Compare 2026 slabs, monthly and half-yearly calculations, exemptions and employer duties. Includes West Bengal’s October changes, Odisha’s repeal, Karnataka’s February deduction and answers to common payroll questions.
Professional tax in India is a state or local levy on employment, professions, trades and callings. Your liability depends on the applicable location, income band and exemptions. The constitutional ceiling is ₹2,500 a year in respect of a person payable to a state or the specified local authority, but many employees pay less or nothing.
For 2026 payroll, the date matters as much as the state. West Bengal changed its employee slabs from 1 October 2026. Odisha repealed its professional tax law with effect from 1 April 2026. Karnataka now collects ₹300 in February from employees in its taxable salary band.
This guide brings the state comparisons, calculation periods and practical payroll questions together. It is written for employees in India and for companies in the USA, UK, Australia and New Zealand hiring Indian teams. Amounts are in Indian rupees. Where a current primary schedule could not be independently read, that limitation is stated beside the relevant entry.
Professional tax is a separate employment-related levy that an employer usually deducts from an eligible employee’s salary and pays to the relevant state or local authority. It is not limited to people with professional qualifications.
No. Professional tax, income-tax withholding and provident fund serve different purposes and follow different rules.
| Payslip item | What it represents | What determines the amount? |
|---|---|---|
| Professional tax, PT or P Tax | A state or local levy on employment | Applicable jurisdiction, income band, period and exemptions |
| Income-tax TDS | Income tax withheld from salary | Taxable income, applicable regime and permitted adjustments |
| Employee provident fund | A retirement savings contribution | Applicable provident fund coverage and contribution rules |
An employee can therefore have PT deducted even when no income-tax TDS is due. Choosing the new income-tax regime does not, by itself, remove state professional tax.
For employers setting up the full salary process, our EOR payroll guide explains how payroll responsibilities fit together.
The ceiling is ₹2,500 per year, not per month. Article 276(2), reproduced by the Income Tax Department, states the annual limit.
The ceiling does not require every state to collect ₹2,500. A ₹200 monthly schedule can produce ₹2,400 for a full year. A ₹208 monthly schedule produces ₹2,496 unless the applicable law specifies an annual adjustment or alternative annual payment.
Do not treat the ceiling as a universal monthly deduction of ₹208.33. And do not assume that tax paid in one state automatically creates a credit in another. Transfers and overlapping employment require the relevant state rules to be checked.
There is no single national slab. The tables below distinguish monthly salary bands, annual salary bands and half-yearly income bands so that the income period and the tax period are not confused.
These are employee salary references. Business owners, directors and independent professionals may fall under different entries. A salary below the employee threshold does not establish that a business has no enrolment liability.
The following states use monthly salary bands. Read the entire row, including the February and effective-date notes.
| State | Monthly salary band → monthly PT | Source and important qualification |
|---|---|---|
| Andhra Pradesh | Up to ₹15,000 → nil. ₹15,001–₹20,000 → ₹150. Above ₹20,000 → ₹200. | Cross-checked against the state-wise payroll reference. The AP portal’s linked schedule did not render as a readable PDF during this review. |
| Assam | Up to ₹15,000 → nil. ₹15,001–₹24,999 → ₹180. ₹25,000 and above → ₹208. | The April 2025 Assam notification replaced the older salary entry. Tables retaining the ₹10,000 exemption threshold are outdated. |
| Gujarat | Up to ₹12,000 → nil. Above ₹12,000 → ₹200. | Confirmed by Surat Municipal Corporation’s professional tax guidance. Exactly ₹12,000 is within the nil band. |
| Karnataka | Below ₹25,000 → nil. ₹25,000 and above → ₹200, except ₹300 in February. | The Karnataka employer FAQ confirms the threshold and February 2026 instruction. Exactly ₹25,000 is taxable. |
| Maharashtra: men | Up to ₹7,500 → nil. ₹7,501–₹10,000 → ₹175. Above ₹10,000 → ₹200, except ₹300 in February. | See the Maharashtra employee rate table. The February uplift belongs to the upper band. |
| Maharashtra: women | Up to ₹25,000 → nil. Above ₹25,000 → ₹200, except ₹300 in February. | The higher exemption threshold applies to women employees. It does not mean all women are exempt at every salary. |
| Mizoram | Up to ₹5,000 → nil. ₹5,001–₹8,000 → ₹75. ₹8,001–₹10,000 → ₹120. ₹10,001–₹12,000 → ₹150. ₹12,001–₹15,000 → ₹180. ₹15,001–₹20,000 → ₹195. Above ₹20,000 → ₹208. | The Mizoram notification dated 11 July 2024 also specifies annual lump-sum alternatives. Its top annual alternative is ₹2,500. |
| Nagaland | Below ₹4,000 → nil. Above ₹4,000 and below ₹5,000 → ₹35. Above ₹5,000 and below ₹7,000 → ₹75. Above ₹7,000 and below ₹9,000 → ₹110. Above ₹9,000 and below ₹12,000 → ₹180. ₹12,000 and above → ₹208. | The official Nagaland schedule uses wording that leaves exact intermediate boundary amounts unclear. Confirm treatment of exactly ₹4,000, ₹5,000, ₹7,000 or ₹9,000 with the department. |
| Sikkim | Up to ₹20,000 → nil. ₹20,001–₹30,000 → ₹125. ₹30,001–₹40,000 → ₹150. Above ₹40,000 → ₹200. | Supported by the Sikkim compliance reference. The government’s current consolidated schedule could not be independently retrieved. |
| Telangana | Up to ₹15,000 → nil. ₹15,001–₹20,000 → ₹150. Above ₹20,000 → ₹200. | See the Telangana statutory professional tax schedule. |
| Tripura | Up to ₹7,500 → nil. ₹7,501–₹15,000 → ₹150. Above ₹15,000 → ₹208. | Cross-checked against the Tripura payroll guide. The linked underlying revision PDF could not be retrieved during this review. |
| West Bengal, from 1 October 2026 | Up to ₹20,000 → nil. Above ₹20,000–₹30,000 → ₹100. Above ₹30,000–₹50,000 → ₹140. Above ₹50,000–₹1,00,000 → ₹170. Above ₹1,00,000 → ₹208. | The final change is Notification 1607-F.T. dated 16 September 2026. See the revised slab comparison and the transition explanation below. |
Whole-rupee bands are shown for readability. Payroll systems should retain the legal “exceeds” and “does not exceed” tests rather than create gaps for salaries containing paise.
Bihar, Jharkhand, Madhya Pradesh and Manipur use annual salary bands in the references below. An annual assessment basis does not necessarily mean that deductions, deposits and returns all happen annually.
| State | Annual salary band → annual PT | How to read it |
|---|---|---|
| Bihar | Up to ₹3,00,000 → nil. Above ₹3,00,000–₹5,00,000 → ₹1,000. Above ₹5,00,000–₹10,00,000 → ₹2,000. Above ₹10,00,000 → ₹2,500. | Bihar’s compliance reference identifies an annual levy and September salary deduction. Check payment and return obligations separately. |
| Jharkhand | Up to ₹3,00,000 → nil. Above ₹3,00,000–₹5,00,000 → ₹1,200. Above ₹5,00,000–₹8,00,000 → ₹1,800. Above ₹8,00,000–₹10,00,000 → ₹2,100. Above ₹10,00,000 → ₹2,500. | Use the annual amounts in the Jharkhand rate reference. Do not mistake the top annual liability for exactly ₹208 × 12. |
| Madhya Pradesh | Up to ₹2,25,000 → nil. Above ₹2,25,000–₹3,00,000 → ₹1,500. Above ₹3,00,000–₹4,00,000 → ₹2,000. Above ₹4,00,000 → ₹2,500. | Monthly recovery: ₹125 throughout, or ₹166 for 11 months plus ₹174 in month 12, or ₹208 for 11 months plus ₹212 in month 12. See the MP statutory slab compilation. |
| Manipur | Up to ₹50,000 → nil. Above ₹50,000–₹75,000 → ₹1,200. Above ₹75,000–₹1,00,000 → ₹2,000. Above ₹1,00,000–₹1,25,000 → ₹2,400. Above ₹1,25,000 → ₹2,500. | Cross-checked against the Manipur compliance reference. Confirm the applicable annual assessment with the state portal. |
Primary schedule retrieval was incomplete for these four states. The linked compliance references are identified as secondary sources rather than described as independently verified government schedules.
Chennai calculates professional tax using half-yearly income. Its latest published municipal table is not a monthly salary table and should not be applied automatically to every Tamil Nadu local body.
| Half-yearly income | PT per half-year |
|---|---|
| Up to ₹21,000 | Nil |
| ₹21,001–₹30,000 | ₹180 |
| ₹30,001–₹45,000 | ₹425 |
| ₹45,001–₹60,000 | ₹930 |
| ₹60,001–₹75,000 | ₹1,025 |
| Above ₹75,000 | ₹1,250 |
These are the rates published by the Greater Chennai Corporation Revenue Department for the second half of 2024–25 onwards. For Coimbatore, Madurai or another location, establish the responsible local body and use its applicable assessment.
An employee earning ₹25,000 each month throughout a six-month period has ₹1,50,000 of income for this simple illustration. That falls in Chennai’s ₹1,250 half-yearly band. Applying the ₹25,000 monthly amount directly to the half-yearly table would produce the wrong result.
Kerala’s revised half-yearly schedule has a maximum of ₹1,250 per half-year. The revision order specifies the following bands from the second half of 2024–25.
| Half-yearly income | PT per half-year |
|---|---|
| Below ₹12,000 | Nil |
| ₹12,000–₹17,999 | ₹320 |
| ₹18,000–₹29,999 | ₹450 |
| ₹30,000–₹44,999 | ₹600 |
| ₹45,000–₹99,999 | ₹750 |
| ₹1,00,000–₹1,24,999 | ₹1,000 |
| ₹1,25,000 and above | ₹1,250 |
The linked copy and English translation of Kerala’s revision order is hosted by a compliance provider. The government-hosted original could not be fetched during this review. Confirm the local body’s implementation and assessment before using the table for a filing.
Pondicherry Municipality publishes half-yearly income bands and maximum half-yearly tax. Its table is shown below.
| Half-yearly income | Maximum PT per half-year |
|---|---|
| Below ₹1,00,000 | Nil |
| ₹1,00,000–₹2,00,000 | ₹250 |
| Above ₹2,00,000–₹3,00,000 | ₹500 |
| Above ₹3,00,000–₹4,00,000 | ₹750 |
| Above ₹4,00,000–₹5,00,000 | ₹1,000 |
| Above ₹5,00,000 | ₹1,250 |
The municipality’s professional tax guidance also explains its 60-day applicability condition. Confirm the relevant municipality or commune panchayat, especially for locations outside Pondicherry Municipality.
Punjab has State Development Tax, while Meghalaya requires a separately verified notified schedule. Neither should be silently treated as a state with no employment-related tax.
| Jurisdiction | Position for payroll planning | What still needs checking? |
|---|---|---|
| Punjab | State Development Tax generally operates at ₹200 per month for persons within its statutory coverage. | The official Punjab portal lists threshold clarifications and amendments. Check assessability, exclusions and any available annual payment option. Do not hard-code an old ₹2.5 lakh income threshold or assume zero tax after an income-tax rebate means exemption. |
| Meghalaya | Professional tax applies, but a current notified rate schedule could not be independently verified for this guide. | Obtain the operative salary schedule from the Meghalaya Taxation Services portal or the competent collecting authority. Do not configure payroll from an undated internet table. |
The locations below are generally treated as having no current salary professional tax deduction. Chhattisgarh and Odisha need separate explanations because their histories differ from places where the levy is not operational.
Delhi, Haryana, Uttar Pradesh and several other jurisdictions do not currently collect salary professional tax. The state and union territory comparison, together with the all-jurisdiction statutory review, supports the following practical grouping.
| Category | Locations |
|---|---|
| States with no current salary PT levy | Arunachal Pradesh, Goa, Haryana, Himachal Pradesh, Rajasthan, Uttar Pradesh and Uttarakhand |
| Union territories with no current salary PT levy | Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli and Daman and Diu, Delhi, Jammu and Kashmir, Ladakh and Lakshadweep |
| Separate exemption or repeal position | Chhattisgarh and Odisha |
West Bengal’s mid-year change, Karnataka’s February amount and Assam’s revised exemption threshold deserve specific checks. A payroll system can contain an apparently current “2026” table while still using an earlier schedule.
West Bengal raised the nil salary band to ₹20,000 and introduced monthly amounts of ₹100, ₹140, ₹170 and ₹208 above it. The final notification applies the employee rates from 1 October 2026.
The earlier bands through September were nil up to ₹10,000, ₹110 above ₹10,000–₹15,000, ₹130 above ₹15,000–₹25,000, ₹150 above ₹25,000–₹40,000 and ₹200 above ₹40,000.
TeamLease’s report on final Notification 1607-F.T. distinguishes the October 2026 employee changes from the remaining changes effective in April 2027. The August draft is not the final reference. The official portal was accessible only as a JavaScript shell, so the final notification was corroborated through compliance publishers.
For an employee earning ₹35,000 every month, the FY 2026–27 calculation is ₹150 × 6 plus ₹140 × 6, or ₹1,740. Using only the new rate for all 12 months would understate that illustration by ₹60.
Karnataka’s amended schedule makes February ₹300 for taxable employees, with ₹200 in each other month. The 2025 Karnataka amendment supports a full-year total of ₹2,500 when all 12 months are taxable.
The important boundary is “₹25,000 and above.” An employee on exactly ₹25,000 is not within Karnataka’s nil band. Maharashtra’s women-employee threshold works differently: exactly ₹25,000 remains exempt there.
Replace Assam salary tables that still collect ₹150 between ₹10,000 and ₹15,000. The April 2025 notification makes monthly salary up to ₹15,000 exempt.
For Chennai, use the latest column of the corporation’s table, including ₹180, ₹425 and ₹930 in the revised middle bands. For Kerala, distinguish the revised order from older tables listing ₹120, ₹180 and ₹300 in the lower taxable bands. Keep the effective date and collecting authority attached to every saved rate sheet.
Identify the jurisdiction, determine the salary or income measure required by its law, and then apply the correct period and slab. Do not use CTC or net bank credit as an automatic substitute for the statutory salary base.
The governing law’s definition of salary, wages or income controls. Many schedules use gross salary or wages, but the treatment of particular allowances, reimbursements, arrears and bonuses requires the applicable definition.
CTC can include employer contributions and other costs that are not monthly salary paid to the employee. Net salary already reflects deductions. Using either figure without checking the legal base can put an employee in the wrong band.
A practical calculation sequence is:
The answer changes by location. The examples below assume ₹25,000 is the applicable salary base and that the employee has no separate exemption.
| Location or category | Illustrative PT |
|---|---|
| Karnataka | ₹200 in ordinary months and ₹300 in February |
| Maharashtra, woman employee | Nil at exactly ₹25,000 |
| Maharashtra, man employee | ₹200 in ordinary months and ₹300 in February |
| Gujarat | ₹200 per month |
| Telangana or Andhra Pradesh | ₹200 per month |
| Assam | ₹208 per month |
| West Bengal | ₹100 per month from October 2026, previously ₹130 |
| Chennai | ₹1,250 for six months of salary totalling ₹1,50,000 |
| Bihar | Nil if the relevant annual salary is exactly ₹3,00,000 |
| Delhi | No current salary PT levy |
These examples show why “₹200 PT for everyone in India” is an unreliable payroll setting.
Yes, but there is no universal national rule for prorating professional tax. The relevant salary definition, assessment period and local provisions determine the result.
An annual-band state may require an annual assessment rather than simply multiplying one unusual payslip by 12. A half-yearly jurisdiction may have a minimum period of employment or activity. Gujarat’s published rate schedule also contains a specific rule for employees ceasing employment before month-end.
Ask payroll to show the income base, period and rule used. When an employee leaves, reconcile PT alongside the other amounts in the full and final settlement.
Start by asking payroll for the state, assessment period and slab behind the deduction. Those three details explain most differences more effectively than comparing two payslips in isolation.
The answer depends on where the employment is exercised and the applicable state law. The employer’s headquarters, salary-paying bank and employee’s permanent home address are not interchangeable tests.
Karnataka’s official FAQ gives a useful example: employees working in Bengaluru remain within Karnataka’s PT framework even when a Punjab head office pays their salary. A permanent remote relocation needs a fresh location assessment, not just an address change in the payroll software.
Provide payroll with the actual work location, relocation date, assigned establishment and any previous deductions. For a temporary visit or cross-state arrangement, request a written explanation of the jurisdiction used.
Check whether the deductions cover the same period and jurisdiction, then ask both payroll teams to reconcile them under the relevant state procedure. A duplicate-looking deduction is not resolved by assuming that one employer can automatically ignore its obligation.
Keep both payslips, joining and leaving dates, year-to-date deduction details and any certificate of previous tax payment. The questions to resolve are whether tax was due twice, whether a declaration or adjustment is available, and which employer or authority must correct the record.
If the jobs were in different states, do not assume a nationwide credit or automatic refund. Establish each liability first.
Yes. Being below an income-tax threshold or receiving an income-tax rebate does not automatically exempt you from PT. The state employee slab is a separate test.
For example, a taxable Karnataka salary can attract PT even if the employee’s final income-tax liability is nil. Punjab needs its own analysis because its State Development Tax coverage refers to income-tax assessability. That is another reason not to apply a generic answer to every state.
Professional tax paid can reduce taxable salary under the old regime, but the employment-tax deduction is not available under the new regime. The PT payment obligation and the income-tax deduction are two separate issues.
For tax year 2026–27, use section 19 of the Income-tax Act, 2025 together with the exclusions in section 202 governing the new regime. For earlier years governed by the 1961 Act, the familiar provision is section 16(iii).
An income-tax deduction reduces taxable income. It is not a rupee-for-rupee tax credit and does not mean that filing an income-tax return refunds the PT itself.
An incorrect deduction may be adjustable or refundable through payroll and the relevant state or local authority. The route depends on whether the employer has already deposited the money and filed the return.
Send a short reconciliation showing the expected amount, actual deduction, relevant month and reason for the difference. Ask whether payroll will correct a future payslip, amend a return or submit a refund claim. Keep the written outcome rather than relying on a verbal assurance.
For Odisha, specifically identify deductions for periods from 1 April 2026 onwards and ask how the repeal has been implemented. Keep earlier arrears separate.
Exemptions are state-specific, and independent professionals may have their own enrolment obligations. Neither the word “freelancer” nor the absence of employees creates an automatic exemption.
No. Eligibility, age limits, disability conditions and documentation vary by jurisdiction. A national list without state qualifications can cause incorrect deductions.
For example, section 27A of Maharashtra’s professional tax law contains specific exemptions, including persons who have completed 65 years and qualifying disability-related categories. Maharashtra’s separate women-employee salary threshold should not be exported to another state.
Collect the evidence required by the applicable law, record the effective date and review it when the employee’s location or circumstances change.
Potentially, yes. Enrolment can attach to the person’s profession, trade, business or specified category rather than to the employment of staff or the possession of a GST registration.
Employee withholding registration and a business’s own enrolment are different obligations. The Manipur government’s professional tax FAQ, for example, expressly describes enrolment for liable persons other than salary earners whose tax is paid through their employer.
A consultant serving a US or UK client should therefore check the local professional category and income or turnover test. Payment in dollars or pounds does not, by itself, remove an Indian state obligation. And a company director should check the director entry rather than assume the employee salary table is the only relevant one.
Employers should identify each applicable jurisdiction, obtain the right registration, deduct correctly, deposit the money and file the required returns. Completing one of these steps does not automatically complete the others.
In Maharashtra, PTRC is the registration used for deducting and paying employees’ professional tax. PTEC is enrolment for the person or entity’s own professional tax liability. A business may need both, depending on its circumstances.
The certificate names are not universal across India. Establish the employer’s withholding role separately from the entity’s own liability, then confirm the forms used by the relevant authority.
Before onboarding payroll, gather entity details, authorised signatory information, the establishment address, employee locations, salary data and any supporting exemption records. Keep registration ownership and portal access clear when an outside provider handles filings.
There is no single professional tax deadline for India. A monthly deduction can coexist with an annual return, while an enrolled professional may follow a different payment calendar from an employer.
| Example | Verified distinction | Payroll implication |
|---|---|---|
| Karnataka employer | The official FAQ specifies payment by the 20th of the succeeding month. | Track the employee deduction month and payment deadline separately. |
| Bihar employer | The compliance reference identifies September salary deduction and an annual return on 30 November. | Do not turn the annual slab table into 12 equal deductions without checking the rules. |
| Manipur enrolled person | The government FAQ states 30 September, with a separate rule for enrolment after 31 August. | This is an enrolment deadline example, not a universal employer deadline. |
| Chennai and Puducherry | The assessment basis is half-yearly. | Use the relevant municipal payment and statement requirements. |
Maintain separate calendar fields for deduction, deposit and return filing. Check extensions and category-specific instructions for the period being filed. A generic internet “due date” may describe the wrong taxpayer category.
Deducting PT from salary does not discharge the employer’s payment and filing obligations. Delays can attract interest, late fees, penalties or other proceedings under the applicable law.
There is no universal national penalty percentage. The Manipur FAQ, for example, describes monthly interest and separate penalty provisions for its own framework. Those figures should not be copied into another state’s compliance calendar.
For each payroll period, reconcile three totals: PT deducted from employees, PT reported in the return, and PT actually deposited. Investigate any mismatch before closing the period.
Foreign headquarters do not create a separate Indian professional tax rate. The local employment arrangement and the employee’s relevant Indian jurisdiction determine the compliance work.
The Indian legal employer normally handles applicable employee PT deductions, deposits and filings. The client company should confirm that responsibility in its EOR agreement and review the payroll evidence.
Before signing, ask the provider:
Use these questions alongside our comparison of EOR providers in India. If you already have an Indian entity, the responsibilities will depend on the payroll outsourcing or EOR versus PEO arrangement you choose.
PT is generally an employee deduction, so it should not automatically be added again as an employer tax. The cost treatment changes if the employer agrees to absorb it or guarantees a net take-home amount.
Ask for a salary illustration showing gross pay, employee deductions, employer contributions, provider fees and net pay as separate lines. This prevents double-counting when converting an Indian offer into USD, GBP, AUD or NZD budgets.
The amount of PT is modest. The larger operational issue is whether the provider can consistently assign the right jurisdiction, maintain the correct rates and prove that deductions reached the authority.
Peorient can help companies compare providers against their India hiring requirements. Share the intended work locations, team size and whether an Indian entity already exists when requesting a provider shortlist.
Use the state tables to identify the questions your payroll provider must answer. For a live payroll decision, confirm the operative notification, local assessment and employee-specific exemption before applying the deduction.
If your overseas business needs help comparing India employment partners, review our EOR providers in India comparison or send Peorient your hiring requirements. Include employee locations, roles and expected working hours so the comparison reflects the work your team will actually perform.
Written by
Director of Global Hiring Advisory · 6+ years experience
Arjun runs the global hiring advisory practice at Peorient. He previously led APAC operations at an EOR startup and advised at Singapore's EDB, overseeing workforce launches in 18 countries across EOR, PEO, and subsidiary models.
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Professional tax in India depends on the employee’s state, salary and local rules. Compare 2026 slabs, monthly and half-yearly calculations, exemptions and employer duties. Includes West Bengal’s October changes, Odisha’s repeal, Karnataka’s February deduction and answers to common payroll questions.
