Stox N Tax

Professional Tax Calculation in Each State (As per State Acts): A Comprehensive Guide

Introduction

Professional Tax (PT) is a state-imposed tax on income earned by individuals from employment, profession, or trade. It is levied under the authority of Article 276 of the Constitution of India, which empowers states to impose a tax on professions, trades, callings, and employments.

Every state frames its own Professional Tax Act, prescribing slabs, exemptions, registration, and payment rules. However, the maximum annual PT liability is capped at ₹2,500 across India.

This guide offers a state-wise breakdown of professional tax slabs and explains the salary components considered for calculation, enabling employers and professionals to remain fully compliant.

Salary Components Considered for PT Calculation

Professional Tax is typically calculated on the gross monthly salary, but some components are included or excluded based on respective state rules.

Included in PT Calculation:

  • Basic Pay
  • Dearness Allowance (DA)
  • Special Allowance
  • Bonus (if part of monthly salary structure)
  • Incentives (if fixed or non-performance linked)
  • Any other taxable regular allowance

Commonly Excluded:

  • House Rent Allowance (HRA), if exempt under Income Tax
  • Conveyance allowance (up to ₹1,600 per month)
  • Reimbursement for telephone, internet, or medical bills
  • Leave Travel Allowance (LTA)

Employers should refer to the respective State Act for precise inclusions and exemptions.

State-Wise Professional Tax Slabs (As per Latest Provisions)

Andhra Pradesh

  • Up to ₹15,000 – Nil
  • ₹15,001 to ₹20,000 – ₹150 per month
  • Above ₹20,000 – ₹200 per month

Telangana

(Same as Andhra Pradesh)

Maharashtra

  • Women earning up to ₹7,500 – Nil
  • Others earning up to ₹10,000 – Nil
  • ₹10,001 to ₹15,000 – ₹175 per month
  • Above ₹15,000 – ₹200 per month (₹300 in February)

Karnataka

  • Up to ₹15,000 – Nil
  • Above ₹15,000 – ₹200 per month

Tamil Nadu

  • Up to ₹21,000 – Nil
  • ₹21,001 to ₹30,000 – ₹100 per month
  • ₹30,001 to ₹45,000 – ₹135 per month
  • ₹45,001 to ₹60,000 – ₹180 per month
  • ₹60,001 to ₹75,000 – ₹235 per month
  • Above ₹75,000 – ₹295 per month

West Bengal

  • Up to ₹10,000 – Nil
  • ₹10,001 to ₹15,000 – ₹110
  • ₹15,001 to ₹25,000 – ₹130
  • ₹25,001 to ₹40,000 – ₹150
  • Above ₹40,000 – ₹200

Gujarat

  • Up to ₹5,999 – Nil
  • ₹6,000 to ₹8,999 – ₹80
  • ₹9,000 to ₹11,999 – ₹150
  • ₹12,000 and above – ₹200

Madhya Pradesh

  • Up to ₹18,750 – Nil
  • ₹18,751 to ₹25,000 – ₹125
  • ₹25,001 to ₹33,333 – ₹167
  • ₹33,334 and above – ₹208

Odisha

  • Up to ₹13,304 – Nil
  • ₹13,305 to ₹25,000 – ₹125
  • ₹25,001 to ₹41,666 – ₹200
  • Above ₹41,667 – ₹250

Kerala

  • Up to ₹1,999 – Nil
  • ₹2,000 to ₹2,999 – ₹20
  • ₹3,000 to ₹4,999 – ₹30
  • ₹5,000 to ₹7,499 – ₹50
  • ₹7,500 to ₹9,999 – ₹75
  • ₹10,000 to ₹12,499 – ₹100
  • ₹12,500 and above – ₹125 to ₹200 (as per notified slabs)

Note: The above figures are indicative and subject to periodic revisions. Always refer to the latest circulars or gazette notifications of the respective state.

Who Is Liable to Pay Professional Tax?

Salaried Employees

  • Employer’s responsibility to deduct PT from salary every month
  • Must remit the tax to the State Tax Department within the due date
  • Must obtain a Professional Tax Registration Certificate (PTRC)

Self-Employed Professionals & Freelancers

  • Required to register under PTEC (Professional Tax Enrollment Certificate)
  • Must self-assess and pay tax as per applicable slab

Examples: Chartered Accountants, Doctors, Architects, Traders, Consultants

Professional Tax FAQs

Q1. Is Professional Tax applicable in all states?

No. It is levied only in states that have enacted a Professional Tax Act. States like Delhi, Haryana, Rajasthan, Uttar Pradesh, and Goa currently do not levy professional tax.

Q2. Can professional tax be claimed as a deduction?

Yes. Section 16(iii) of the Income Tax Act, 1961 allows professional tax as a deduction from gross salary income while computing taxable income.

Q3. Is PT applicable to all forms of income?

No. PT applies only to income from:

  • Salaried employment
  • Business
  • Profession

It does not apply to income from capital gains, interest, or investments.

Q4. What if an employee works in multiple states?

Professional tax is payable in the state where the employee is primarily based or where the salary is processed. It is not payable in multiple states for the same income.

Q5. What are the consequences of late payment or non-compliance?

Penalties vary by state and may include:

  • Interest on unpaid tax
  • Late fees per day or per month of delay
  • Fixed fines or prosecution in case of continued default

Employers may also face revocation of registration or inspection proceedings.

Conclusion

Professional tax is a mandatory state levy that all salaried individuals and self-employed professionals must comply with in applicable states. Employers should:

  • Ensure accurate monthly deduction and payment
  • Maintain proper registration and filing records
  • Stay updated on any slab or rate changes

For employees, it is important to understand your liability and deduction eligibility. Self-employed individuals should ensure timely registration and payment to avoid penalties.

For up-to-date compliance guides and tax law interpretations, Stox N Tax remains your trusted partner.

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