Understand the details of professional tax, including how it works, who has to pay it, and more.
Your salary slip may contain a small monthly deduction based on your income, alongside other deductions. It is a professional tax that your employer pays to the state government. Each state’s professional tax laws vary, and some states, like Arunachal Pradesh, do not impose this tax altogether.
Understanding this type of tax is crucial for both an employee and employer to comply with local laws and avoid penalties. As an employer, you are responsible for deducting and remitting the tax. As an employee, you need to know your legal obligations.
It is a state-imposed tax on income earned from various professions, trades, or employment. Despite its name, it applies to everyone, not just professionals. You may be liable to pay this tax if you earn money – whether as an employee, freelancer, or business owner.
Liability for professional tax depends on your income. If your earnings exceed a certain state-specified threshold, you will need to pay it. The amount varies by state, but the maximum annual limit is approximately ₹2,500. This tax is typically shown as a deduction on your payslip.
Before diving into the details of professional tax, it is essential to distinguish it from income tax. Understanding this difference will help clarify your financial obligations. Here are some of the major differences:
Aspect |
Professional Tax |
Income Tax |
Governing Body |
State Government |
Central Government |
Legal Framework |
Article 276 of the Indian Constitution |
Entry number 82 of the Union list of the Indian Constitution mentions it as mandatory for all eligible citizens |
Exemption Limit |
Maximum of ₹2,500 (per the Income Tax Act) |
Maximum exemption for individuals, HUFs, under 60 years: INR 2,50,000 |
Payment Frequency |
Paid in 12 monthly instalments, quarterly, half-yearly, or annually based on the state |
To be paid once a year, but advance tax may be paid in instalments |
Filing Due Date |
Varies by state |
31st July for individuals and HUFs whose accounts are not audited |
Eligibility |
Individuals engaged in professional services or business whose income crosses a specific threshold |
Tax is due if income exceeds the exemption limit; all individuals must pay, regardless of service provision |
Many states in India impose a professional tax on individuals and businesses. Here’s a list of some of the states that levy this tax, the tax slabs, and the range of tax:
Name of State |
Professional Tax Slabs (₹) |
Range of professional tax (per month) (₹) |
Andhra Pradesh |
Above ₹15,001 |
₹150 to ₹200 |
Karnataka |
Above ₹15,000 |
₹200 |
Maharashtra |
₹7,501 to above ₹10,000 |
₹175 to ₹200 |
Maharashtra |
₹7,501 to above ₹10,000 |
₹175 to ₹200 |
Tamil Nadu |
₹21,001 to above ₹75,000 |
₹20 to ₹208 |
Assam |
₹10,001 to above ₹25,000 |
₹150 to ₹208 |
Kerala |
₹2,000 to above ₹20,833 |
₹20 to ₹208 |
Meghalaya |
₹4,167 to above ₹41,667 |
₹16.5 to 208 |
Bihar |
₹25,001 to above ₹83,333 |
₹100 to ₹208 |
Jharkhand |
₹25,001 to above ₹83,333 |
₹100 to ₹208 |
Gujarat |
Above ₹12,000 |
₹200 |
Madhya Pradesh |
₹18,751 to above ₹33,334 |
₹125 to ₹208 |
Madhya Pradesh |
₹18,751 to above ₹33,334 |
₹125 to ₹208 |
West Bengal |
₹10,001 to above ₹40,001 |
₹110 to ₹200 |
West Bengal |
₹10,001 to above ₹40,001 |
₹110 to ₹200 |
Manipur |
₹50,001 to above ₹75,000 |
₹100 to ₹208 |
Mizoram |
₹5,001 to above ₹15,001 |
₹75 to ₹208 |
Mizoram |
₹5,001 to above ₹15,001 |
₹75 to ₹208 |
Odisha |
₹13,333 to above ₹25,000 |
₹125 to ₹200 |
Puducherry |
₹8,333 to above ₹41,667 |
₹125 to ₹208 |
Sikkim |
₹20,001 to above ₹40,001 |
₹125 to ₹200 |
Telangana |
₹15,001 to above ₹20,000 |
₹125 to ₹200 |
Nagaland |
₹4,001 to above ₹12,001 |
₹35 to ₹208 |
Chhattisgarh |
₹8,333 to above ₹20,833 |
₹130 to ₹208 |
Meghalaya |
above ₹12,000 |
₹200 |
Your professional tax as a salaried individual is calculated on your gross monthly income according to the slab rate of the state where you are employed. For example, if you work in Telangana and earn ₹25,000, your monthly tax will be ₹200.
Staying informed about these deadlines is essential to ensure timely payment and avoid penalties. Below is a table summarising the due dates for professional tax across different states:
State |
Periodicity |
Professional Tax Payment Due Date |
Andhra |
Monthly |
10th of every month |
Assam |
Monthly |
28th of every month |
Bihar |
Annually |
30th November of every month |
Gujarat |
Monthly |
15th of every month |
Jharkhand |
Annually |
31st October of every month |
Karnataka |
Monthly |
20th of every month |
Kerala |
Half-yearly |
31st August & 28th February |
Madhya |
Monthly |
10th of every month |
Manipur |
Annually |
30th March |
Meghalaya |
Monthly |
28th of every month |
Mizoram |
Annually |
30th June |
Pondicherry |
Half-yearly |
Last date of every month |
Odisha |
Monthly |
30th June and 31st December |
Sikkim |
Quarterly |
The 31st of July, the 31st of October, the 31st of January, and the 30th of April |
Tamil Nadu |
Monthly |
30th September and 31st March |
Telangana |
Monthly |
10th of every month |
West Bengal |
Half-yearly |
21st of every month |
Failing to pay professional tax by the due date can lead to significant consequences, including penalties and fines. Check out what you need to pay when you miss the due date for professional tax payments:
Nature of default |
Penalty |
Late filing of professional tax return |
₹1,000 |
Late payment of professional tax dues |
Interest @1.25% - 2% per month |
Employers and the Commercial Tax Department are responsible for deducting the professional tax from employees and submitting it to the respective state government. If you are a salaried individual, your employer will collect and remit the professional tax on your behalf within the specified timeframe.
Since professional tax is payable to the state, the online payment process varies by state. However, the general requirements and steps are similar. Below is a simplified guide to paying professional tax online in Karnataka:
1. Find the official website by searching "Professional Tax e-payment" and your city name
2. In this case, visit the Karnataka Commercial Taxes Department website
3. Click on 'Employer Login' in the left menu and log in to your account
4. Choose 'registered employer' as your payment type
5. Enter your Professional Tax Registration Number and company/firm name
6. Select the payment period and specify the year and month
7. Enter the tax amount and any penalties
8. Provide your bank details and mobile number
9. Click 'Enter,' verify the details, and click 'Submit'
10. Click 'Click here for payment,' log in to your bank, and complete the payment
11. Save the payment challan for future reference
Certain individuals do not need to pay professional tax based on specific criteria. Here is a list of those eligible for these benefits:
Women working as agents under the Mahila Pradhan Kshetriya Bachat Yojana
Individuals over 65 years of age
Members of the armed forces (Army, Air Force, Navy)
Parents of children with disabilities
Individuals with mental or physical disabilities, such as blindness or deafness
Temporary workers (Badli workers) in factories
Foreign individuals employed by the state
Those running educational institutes for classes up to 12th standard or pre-university level
Charitable hospitals located below the taluk level
Professional tax applies to everyone, not just professionals. You may be liable to pay this tax if you earn money as an employee, freelancer, or business owner.
Employers and the Commercial Tax Department are responsible for deducting professional tax from employees and submitting it to the respective state government.
Professional tax is a direct tax levied by the state government, and payment methods can vary by state. You can pay it online through the official website of your state. If you are a salaried individual, your employer will collect and remit the professional tax on your behalf.
In this case, you do not need to consider completing any professional tax return filing process separately. Professional tax is generally non-refundable because it is a state-mandated levy for professionals. However, you can claim it as a deduction when you file your income tax returns.