Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
State tax on salary/profession
Levied by states, not the centre, so not every state has it.
Employer deducts; ₹2,500 cap
Employers deduct from salaries; the maximum is ₹2,500 per person per year.
States, returns and the employer's role
Because professional tax is levied by states, not the centre, the picture differs across the country: states like Maharashtra, Karnataka, West Bengal, Tamil Nadu and Telangana levy it, while several others don’t have it at all. Two obligations can arise. An employer deducts PT from employees’ salaries by slab and deposits it, filing periodic returns (monthly or annually depending on the state and the amount). Separately, the business itself — and any self-employed professional — pays PT on its own account. The annual ceiling is ₹2,500 per person, so even at the highest slab the yearly burden is small, but the compliance is recurring and the penalties for non-registration or late payment, though modest, accumulate. A business operating in more than one PT state needs to register and comply in each separately, since one state’s registration doesn’t cover another. Confirming the current slabs and return frequency for each state of operation is the practical starting point, ideally before the first payroll run there.