Professional Tax

Key facts

• Professional tax is levied by states under Article 276 of the Constitution; the maximum is ₹2,500 per person per year.
• It is levied in states such as Maharashtra, Karnataka, West Bengal, Tamil Nadu, Andhra Pradesh, Telangana, Gujarat, Madhya Pradesh, Kerala, Odisha, Assam, Bihar and Jharkhand. Slabs and due dates differ by state.
• Delhi, Uttar Pradesh, Haryana and Rajasthan don't levy professional tax. Punjab charges a development tax of ₹200 a month instead.
• Employers deduct it from salary and deposit it under their employer registration (for example PTRC in Maharashtra). The business itself pays a separate enrolment tax (for example PTEC).
• Professional tax paid is deductible from salary income in the old regime (not in the new regime).

Common questions

What is the maximum professional tax?

₹2,500 per person per year, the limit set by the Constitution. Each state fixes its own slabs within this.

Is professional tax charged in Delhi or UP?

No. Delhi, Uttar Pradesh, Haryana and Rajasthan don't levy professional tax. Punjab charges a ₹200 monthly development tax instead.

Who pays professional tax, employer or employee?

The employee bears it; the employer deducts it from salary and deposits it. Businesses and professionals also pay their own annual professional tax under a separate enrolment.

Can I claim professional tax in my income tax return?

Yes, as a deduction from salary under the old regime. It is not allowed in the new regime.