Professional Tax in India: A Guide for Employers and Professionals

Professional tax is a tax levied by state governments on people earning an income through employment, a profession, a trade or a calling. It is a small amount, but it comes with registration and filing obligations, especially for employers.

Which states levy professional tax?

Only some states and union territories levy professional tax – including Maharashtra, Karnataka, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Gujarat and Madhya Pradesh, among others. Several states, such as Delhi and Uttar Pradesh, do not currently levy it. The maximum amount any person can be charged is capped by the Constitution.

Two types of registration

• Registration Certificate (PTRC) – for employers, to deduct professional tax from employees’ salaries and deposit it with the state.
• Enrolment Certificate (PTEC) – for the business or professional itself, to pay its own professional tax.

Employer responsibilities

1. Register within the time allowed after hiring employees in the state.
2. Deduct professional tax from salaries as per the state’s slab rates.
3. Deposit the tax and file returns by the state’s due dates (monthly, quarterly or annually, depending on the state and amount).

Is professional tax deductible?

Yes. Professional tax paid is allowed as a deduction from salary income under the Income-tax Act, subject to the prevailing provisions.

Penalties

Late registration, late payment and late filing attract interest and penalties under the respective state laws.

Stay compliant with our professional tax registration and filing service. Also see TDS on salary.

Why Choose Vaidam Consultancy?

Our team of chartered accountants, company secretaries and legal professionals handles the paperwork so you can focus on growing your business.

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📋 Deadline Tracking

We remind you before every due date, so you never pay avoidable late fees.

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Call or WhatsApp us at +91 78369 69141 or email vaidamconsultancyllp@gmail.com.

Frequently Asked Questions

Q1. Who deducts professional tax for salaried employees?

The employer deducts it from salary and deposits it with the state.

Q2. Is professional tax charged in Delhi?

Delhi does not currently levy professional tax.

Q3. Do freelancers pay professional tax?

In states that levy it, self-employed professionals must enrol and pay it themselves.

Q4. Is professional tax the same in every state?

No. Rates, slabs and due dates differ from state to state.