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A small employer is unsure whether to deduct professional tax and how much to pay.
Check whether the state of work levies it, apply that state's slab to monthly salary, and pay by the state's due date.
State registration, current slab table per state, employee state-of-work field and a due-date calendar.
Correct monthly deduction per employee, within the ₹2,500 yearly cap, paid to the right state on time.
Professional tax is a tax that some Indian states charge on salaried employees, professionals and some businesses. For employees, the employer deducts it from monthly salary and pays it to the state government. The Constitution caps it at ₹2,500 per person per year.
Who has to pay professional tax?
Three groups, but only in states that levy it:
- Salaried employees: the employer deducts it from salary and pays it.
- Self-employed professionals, such as doctors, lawyers and CAs: they pay it directly.
- Some businesses and firms: they pay a fixed yearly amount in certain states.
The power to levy it comes from Article 276 of the Constitution, which is also where the ₹2,500 yearly cap is set. Each state writes its own law, slabs and dates within that cap.
Which states charge it, and how do slabs differ?
States that levy professional tax include Karnataka, Maharashtra, Gujarat, West Bengal, Tamil Nadu and Telangana, among others. Slabs depend on monthly salary, and each state sets its own threshold and amounts. The table below summarises what our state-wise guide records; slab amounts change, so check each state’s current notification before you set up payroll.
| State | Slab style (illustrative) | Usual payment date |
|---|---|---|
| Karnataka | ₹200 a month above a salary threshold | 20th of next month |
| Maharashtra | Several slabs from ₹175 to ₹300 a month, higher in February | End of next month |
| Gujarat | ₹200 a month above a salary threshold | 15th of next month |
| West Bengal | ₹110 to ₹200 a month across slabs | 21st of next month |
| Tamil Nadu | Half-yearly, slab-based | Half-yearly |
Note how Maharashtra’s higher February amount brings the year to the cap: a fixed ₹200 for 11 months is ₹2,200, so a higher final month makes up the rest.
Does the employer have to register?
In a levying state, yes. An employer usually needs a registration certificate to deduct and pay employees’ professional tax, and files returns on the state’s portal. Many states also need a separate enrolment for the business itself. An employer in a state that does not levy it has nothing to deduct. If employees work in more than one state, the tax follows the state where each employee works, not the head office.
Worked example: an employee on ₹30,000 a month
An employee in a levying state earns ₹30,000 a month. Say the state’s slab for that salary is ₹200 a month (an illustrative figure; check the actual slab).
- October salary: gross ₹30,000, less professional tax ₹200, so the employer deducts ₹200.
- The employer books ₹200 as a liability, “Professional tax payable”, until it is paid.
- The employer pays ₹200 (along with every other employee’s deduction) by the state’s due date, for example 20 November if the state’s date is the 20th of the next month.
- Over 12 months at ₹200, the employee pays ₹2,400, which is within the ₹2,500 cap.
If the employer has 15 such employees, the monthly payment is 15 × ₹200 = ₹3,000, and the liability account should be back to zero after each payment.
What to read next
- Next step: Professional tax state-wise reconciliation for employers in more than one state.
- Statutory payment reconciliation in India, where professional tax sits beside PF, ESI and TDS.
- PF, ESI, professional tax and salary TDS monthly due dates.
- Related: account reconciliation software for India.
TransactIG matches bank statement lines to your books, so each payroll payment is tied to its liability, with an exception queue and audit-ready exports. It also reconciles TDS.