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.

Professional Tax – Meaning, Liability, and How it Differs from Income Tax

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

Professional Tax Rates in Different States

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.

Professional Tax Due Dates

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
Pradesh

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
Pradesh

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
Penalty @10% on total tax amount

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.

How to Pay Professional Tax Online

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

Exemptions and Deductions Under Professional Tax

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

Frequently Asked Questions

Who is responsible for paying professional taxes?

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.

Who is responsible for collecting professional tax?

Employers and the Commercial Tax Department are responsible for deducting professional tax from employees and submitting it to the respective state government.

How to pay professional tax? Is any return to be filed?

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.

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