What is professional tax and who pays it?

Name: Vijay R Singh & Co.
Address: Office No. 4, Vishal CHSL, D Wing, Sir Mathuradas Vasanji Road, Azad Nagar, Opp. Andheri Gymkhana, Andheri East, Maharashtra, 400069, IN
Telephone: +91 98607 23959

CA Vijay R Singh, FCA
Chartered Accountant · ICAI M.No. 153926 · FRN 136869W

Short answerProfessional tax is a small state-level tax on salaries and on professions/trades, deducted by employers from salaries and also payable by self-employed professionals. Because it’s a state tax, rates and rules vary by state, with an annual cap of ₹2,500.

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.

Compliance

← Back to all questions

Talk to CA Vijay R Singh

Unsure about professional tax for your staff? You can message him directly, or book a short call to talk through your situation.

Book a 15-minute call
Message on WhatsApp
Email your query

This answer is general information for businesses, not professional advice. Tax rates, thresholds and forms change with each Finance Act — please confirm the current position for your own facts, or speak to us, before acting.