Professional Tax
Professional Tax is a state-level direct tax imposed in India on individuals, professionals, businesses, and entities engaged in various trades, professions, or employment within a specific state. Article 276 of our constitution empowers the State Gov to impose this tax and set the limit on maximum amount of tax that is Rs 2500. Each state in India has its own Professional Tax Rate, Calculation, Collection method and rules.
Categories under Professional Tax
Two types of categories under PT.
1. Professional Tax Registration Certificate (PTRC)
Salaried Employees
2. Professional Tax Enrolment Certificate) (PTCE)
- Professional (Lawyer, Doctor, CA, Consultant, Engineers, Contractors etc.)
- Company, LLP, Firms,
- Corporations & Clubs
- Societies & Associations
Registration:
Registration for Professional Tax must be completed within 30 days of employing staff in a company, In case multiple branches, Registration has to be done separately for each branch under the jurisdiction of respective sales tax office. Generally, Employers are responsible for registering employees under PTRC (Professional tax Registration Certificate) and deducting Professional Tax from the salaries or wages of their employees.
In the case of professionals, within 30 days from commencing their practice are required to register themselves under PTEC (Professional Tax Enrolment Certificate) and pay directly 2500 to the respective state’s tax authorities.
Tax Exemption (PTRC)
According to section 16 (iii) Of the income tax act 1961 The Profession tax paid by an employee is allowed as a deduction from his gross salary income. Maximum limit is up to Rs 2500/- per year.
Applicability
Professional Tax is applicable to individuals and entities involved in professions, trades, callings, or employments, including salaried employees, self-employed professionals (doctors, lawyers, chartered accountants), traders, and businesses operating within a specific state. For salaried employees’ applicability criteria differ from state to state according to salary slab as per Professional Tax.
Non- Applicability
Exemptions under Professional Tax (PT) vary from state to state in India, as each state has its own Professional Tax Act and rules.
- Senior Citizens: Some states offer exemptions or reduced rates to senior citizens, typically defined as individuals above a certain age threshold, such as 60 or 65 years.
- Persons with Disabilities: Exemptions or concessions may be available to individuals with disabilities, including physical disabilities, visual impairments, or other specified conditions.
- Parents or Guardians: In some cases, parents or guardians responsible for minors or individuals with disabilities may be exempt from paying Professional Tax on their behalf.
- Public Servants: Certain categories of public servants, such as government employees or members of the armed forces, may be exempt from Professional Tax.
- Salaried Employees Below a Certain Income Threshold: Some states provide exemptions for salaried employees whose income falls below a specified threshold.
- Women Professionals: Women professionals may be eligible for exemptions or reduced rates in some states. Women exclusively engaged as agent under the Mahila Pradhan Kshetriya Bachat Yojana or Director of Small Savings.
- Agricultural Income: Income derived solely from agricultural activities, subject to specific conditions, may be exempt from Professional Tax.
- Certain Professions or Trades: Some states may exempt or provide concessions to specific professions or trades as determined by their respective Professional Tax Acts. Like- Badli workers in Textile Industry.
Tax Slab
This tax is typically calculated based on income slabs, and higher-income individuals are subject to higher tax rates. Employers are responsible for deducting Professional Tax from the salaries or wages of their employees and remitting it to the respective state government.
| Sr No | Applicable States | Non-Applicable States |
| 1 | Andhra Pradesh | Central |
| 2 | Assam | Andaman and Nicobar Islands |
| 3 | Bihar | Arunachal Pradesh |
| 4 | Gujarat | Chandigarh |
| 5 | Jharkhand | Chhattisgarh |
| 6 | Karnataka | Dadra and Nagar Haveli |
| 7 | Kerala | Daman and Diu |
| 8 | Madhya Pradesh | Delhi |
| 9 | Maharashtra | Goa |
| 10 | Manipur | Haryana |
| 11 | Meghalaya | Himachal Pradesh |
| 12 | Mizoram | Jammu and Kashmir |
| 13 | Nagaland | Ladakh |
| 14 | Odisha | Lakshadweep |
| 15 | Puducherry | Rajasthan |
| 16 | Punjab | Uttar Pradesh |
| 17 | Sikkim | Uttarakhand |
| 18 | Tamil Nadu | |
| 19 | Telangana | |
| 20 | Tripura | |
| 21 | West Bengal |
The revenue generated from Professional Tax serves as an essential source of income for state governments, enabling them to finance various welfare and development programs, including healthcare, education, and infrastructure projects.
| SR No | State | Registration Process | Filling of Return | Last Date of Filling Return | PT Rate |
| 1 | Andhra Pradesh | Online | Montly | Every Month on Day 10 | Upto 15000 - ₹ 0.00 Between 15001-20000 - ₹ 150 Above 20001 - ₹ 200 |
| 2 | Assam | Offline | Montly | Every Month on Day 28 | Upto 10000 - ₹ 0.00 Between 10001 To 15000 - ₹ 150.00 Between 15001 To 25000 - ₹ 180.00 Above 25001 - ₹ 208.00 |
| 3 | Bihar | Offline | Anually | Every year(s) on day 30 of November | Upto 300000 - ₹ 0.00 Between 300001 To 500000 - ₹ 1000.00 Between 500001 To 1000000 - ₹ 2000.00 Above 1000001 - ₹ 2500.00 |
| 4 | Gujarat | Online | Annual and Monthly | "Annual Return - Every year(s) on day 20 of December Monthly Returns - Every month on day 15 |
Upto 12000 - ₹ 0.00 Above 12000 - ₹ 200.00 |
| 5 | Jharkhand | Offline | Annual | Every year(s) on day 31 of October | Upto 300000 - ₹ 0.00 Between 300001 To 500000 - ₹ 1200.00 Between 500001 To 800000 - ₹ 1800.00 Between 800001 To 1000000 - ₹ 2100.00 Above 1000001 - ₹ 2500.00 |
| 6 | Karnataka |
Online | Annual | Every year(s) on day 30 of May | Above 24999 - ₹ 200.00 |
| 7 | Kerala | Offline | Half yearly | 31st of August 28 Febuary |
Upto 11999 - ₹ 0.00 Between 12000 To 17999 - ₹ 120.00 Between 18000 To 29999 - ₹ 180.00 Between 30000 To 44999 - ₹ 300.00 Between 45000 To 59999 - ₹ 450.00 Between 60000 To 74999 - ₹ 600.00 Between 75000 To 99999 - ₹ 750.00 Between 100000 To 124999 - ₹ 1000.00 Above 125000 - ₹ 1250.00 |
| 8 | Madhya Pradesh | Online | Monthly & Quarterly | Monthly PT Remittance - Every month on day 10 Quarterly Returns - Every 3 month(s) starting on day 15 of January |
Remark Upto 225000 - ₹ 0.00 - Nil Between 225001 To 300000 - ₹ 1500.00 - INR 125 Per Month Between 300001 To 400000 - ₹ 2000.00 - INR 166 Per Month For 11 Months And INR 174 For 12th Month Above 400001 - ₹ 2500.00 - INR 208 Per Month For 11 Months And INR 212 For 12th Month |
| 9 | Maharashtra | Online | Annual & Monthly | Annual Return Every year(s) on day 31 of March Monthly Return Every month on last day |
Salary (INR) PT Amount Remarks Upto 7500 ₹ 0.00 Nil for Male Employees Between 7501 To 10000 ₹ 175.00 For Male Employees Above 10000 ₹ 200.00 For Male Employees Above 10000 ₹ 300.00 Employer has to deduct on February month only for Male Employees Upto 25000 ₹ 0.00 Nil for Female Employees Above 25000 ₹ 200.00 For Female Employees Above 25000 ₹ 300.00 Employer has to deduct on February month only for Female Employees |
| 10 | Manipur | Offline | Annual | Every year(s) on day 30 of March | Upto 50000 - ₹ 0.00 Between 50001 To 75000 - ₹ 1200.00 Between 75001 To 100000 - ₹ 2000.00 Between 100001 To 125000 - ₹ 2400.00 Above 125001 - ₹ 2500.00 |
| 11 | Meghalaya | Offline | Monthly | Every month on day 28 | Upto 50000 - ₹ 0.00 Between 50001 To 75000 - ₹ 200.00 Between 75001 To 100000 - ₹ 300.00 Between 100001 To 150000 - ₹ 500.00 Between 150001 To 200000 - ₹ 750.00 Between 200001 To 250000 - ₹ 1000.00 Between 250001 To 300000 - ₹ 1250.00 Between 300001 To 350000 - ₹ 1500.00 Between 350001 To 400000 - ₹ 1800.00 Between 400001 To 450000 - ₹ 2100.00 Between 450001 To 500000 - ₹ 2400.00 Above 500001 - ₹ 2500.00 |
| 12 | Mizoram | Offline | Anual | Every year(s) on day 30 of June | Salary (INR) PT Amount Remarks Upto 5000 - ₹ 0.00 Nil Between 5001 To 8000 - ₹ 75.00 Assesee may pay in lump sum INR 900 per annum Between 8001 To 10000 - ₹ 120.00 Assesee may pay in lump sum INR 1440 per annum Between 10001 To 12000 - ₹ 150.00 Assesee may pay in lump sum INR 1800 per annum Between 12001 To 15000 - ₹ 180.00 Assesee may pay in lump sum INR 2160 per annum Above 15001 - ₹ 208.00 Assesee may pay in lump sum INR 2500 per annum |
| 13 | Nagaland | Offline | Annual | Every year(s) on day 30 of April | Upto 4000 - ₹ 0.00 Between 4001 To 5000 - ₹ 35.00 Between 5001 To 7000 - ₹ 75.00 Between 7001 To 9000 - ₹ 110.00 Between 9001 To 12000 - ₹ 180.00 Above 12001 - ₹ 208.00 |
| 14 | Odisha | Online | Annual | Every year(s) on day 30 of March | Salary (INR) PT Amount Remarks Upto 160000 ₹ 0.00 Nil Between 160001 To 300000 ₹ 125.00 Above 300001 ₹ 200.00 Above 300001 ₹ 300.00 Employer has to deduct on March month only |
| 15 | Puducherry | Offline | Annual | Every 6 month(s) starting on last day of June | Upto 99999 - ₹ 0.00 Between 100000 To 200000 - ₹ 250.00 Between 200001 To 300000 - ₹ 500.00 Between 300001 To 400000 - ₹ 750.00 Between 400001 To 500000 - ₹ 1000.00 Above 500001 - ₹ 1250.00 |
| 16 | Punjab | Online | Monthly | 20th day of the following month | Salary (INR) PT Amount Remarks Above 250000 - ₹ 200.00 - All such persons who are assessable under the Head Income from Salaries and/ or Wages as per the Income Tax Act, 1961 |
| 17 | Sikkim | Offline | Quaterly | Every 3 month(s) starting on day 30 of April | Upto 20000 - ₹ 0.00 Between 20001 To 30000 - ₹ 125.00 Between 30001 To 40000 - ₹ 150.00 Above 40001 - ₹ 200.00 |
| 18 | Tamil Nadu | Online | Half yearly | Every 6 month(s) starting on last day of September | Upto 21000 - Between 21001 To 30000 - ₹ 135.00 Between 30001 To 45000 - ₹ 315.00 Between 45001 To 60000 - ₹ 690.00 Between 60001 To 75000 - ₹ 1025.00 Above 75001 - ₹ 1250.00 |
| 19 | Telangana | Online | Monthly | Every month on day 10 | Upto 15000 - ₹ 0.00 Between 15001 To 20000 - ₹ 150.00 Above 20001 - ₹ 200.00 |
| 20 | Tripura | Offline | Monthly | 20th day of the following month | Salary (INR) PT Amount Remarks Upto 7500 - ₹ 0.00 - Nil Between 7501 To 15000 - ₹ 1800.00 - INR 150 Per Month Above 15001 - ₹ 2496.00 - INR 208 Per Month |
| 21 | West Bengal | Online | Annual | Every year(s) on day 31 of May | Upto 8500 ₹ 0.00 Nil Between 8501 To 10000 - ₹ 0.00 Between 10001 To 15000 - ₹ 110.00 Between 15001 To 25000 - ₹ 130.00 Between 25001 To 40000 - ₹ 150.00 Above 40001 - ₹ 200.00 |
Consequences for Non-Compliance
Failure to submit Professional Tax (PT) returns and make timely payments can result in several consequences, including legal and financial repercussions. The specific consequences can vary depending on the laws and regulations of the state in India where PT is applicable. Here are some common consequences for not submitting PT:
- Penalties and Interest: Most states impose penalties and interest for late or non-payment of PT. Penalties are typically calculated as a percentage of the unpaid tax amount, and interest accrues on the outstanding dues from the due date. Moreover, they can attach his bank account also.
- Legal Action: Tax authorities may take legal action against individuals or entities that consistently fail to comply with PT regulations. This can include issuing notices, conducting audits, and initiating legal proceedings.
- Fines and Prosecution: In serious cases, prosecution cases also can be filed. Non-compliance with PT regulations may lead to fines, and in severe cases, individuals or entities may face prosecution under the applicable state’s tax laws.
- Non-Deductibility of PT: If an employer fails to deduct PT from employees’ salaries and remit it to the government, the PT amount may not be allowed as a deduction for tax purposes.
- Liability of Directors/Partners: In some cases, the directors or partners of a business entity may become personally liable for unpaid PT dues.
- Seizure of Assets: Tax authorities may have the power to seize assets or properties to recover unpaid PT dues.
- Damage to Reputation: Non-compliance with tax regulations can harm the reputation of individuals or businesses and affect their ability to conduct business or practice their professions.
