Professional Tax in India 2026: State-wise Rates, Who Must Register & How to Pay

Professional Tax is one of the most commonly misunderstood statutory obligations for employers in India. Many founders assume it is only for 'professionals' like doctors and lawyers. It is not. Professional Tax is a direct tax levied by state governments on all individuals earning income through employment, trade, or profession - including every salaried employee of your company.

As an employer, you are legally required to deduct Professional Tax from your employees' salaries each month and remit it to the state government. If you run your own business, you must also pay Professional Tax on your own income. Failing to register or remit can result in fines, interest, and in some states, criminal proceedings.

Professional Tax applies in 21 states and 1 Union Territory in India. The constitutional maximum is Rs 2,500 per year per person - set under Article 276(2) of the Constitution of India. No state can charge more than this cap regardless of income.

Which States Levy Professional Tax? (2026)

Professional Tax is currently applicable in the following states:

• Maharashtra, Karnataka, West Bengal, Andhra Pradesh, Telangana, Tamil Nadu, Gujarat, Madhya Pradesh, Kerala, Assam, Bihar, Odisha, Meghalaya, Tripura, Jharkhand, Manipur, Sikkim, Chhattisgarh, Mizoram, Nagaland, and Puducherry (UT)

Professional Tax does NOT apply in: Delhi, Uttar Pradesh, Haryana, Punjab, Rajasthan, Himachal Pradesh, Jammu & Kashmir, Uttarakhand, and most North-Eastern states. Employees working in offices in these states are not subject to Professional Tax deductions.

Important: It is the state where the employee physically works - not where the company is registered - that determines which state's Professional Tax applies. A company registered in Delhi but operating from Noida (Uttar Pradesh) must check UP's rules for its employees.

Key 2026 Note: New Income Tax Regime and PT Deductibility

Under the Income Tax Act 2025 (effective 1 April 2026), Professional Tax is deductible from salary income under Section 16(iii) - but only for employees and individuals who have opted for the Old Tax Regime. Employees who have chosen the New Tax Regime for Tax Year 2026-27 cannot claim Professional Tax as a deduction. Finance and HR teams should ensure that the correct tax regime of each employee is recorded before calculating their net tax liability.

Two Types of Professional Tax Registration

PTRC (Professional Tax Registration Certificate): 

Required for every employer who deducts PT from the salaries of employees and remits it to the state government. If you have even one salaried employee, you need a PTRC in every state where those employees work.

PTEC (Professional Tax Enrollment Certificate): 

Required for self-employed individuals, business owners, sole proprietors, partners in firms, and directors of companies - to pay Professional Tax on their own income. Every company, firm, LLP, or sole proprietorship must obtain a PTEC independently of the PTRC.

These are two separate registrations in states like Maharashtra. A company with employees needs both PTRC (for employee deductions) and PTEC (for the company's own liability as a business entity). A company operating from Maharashtra, Karnataka, and West Bengal simultaneously needs separate PTRC registrations in all three states.

State-wise Professional Tax Rates 2026

Maharashtra

Karnataka has revised slabs effective from 1 April 2025, which remain current for FY 2026-27. Maharashtra's structure for 2026:

Note: Maharashtra is unique in that it achieves the Rs 2,500 annual cap by charging Rs 200 for 11 months and Rs 300 in February. Due date: last day of the month for employers (PTRC). PTEC payment: annually by 30 June.

Karnataka

Karnataka revised its slabs effective 1 April 2025 and they remain applicable for FY 2026-27:

Karnataka has one of the simplest PT structures in India. The threshold of Rs 25,000 means most junior employees are exempt. Due date: 20th of the following month for employers. Late payment attracts 1.25% interest per month.

Source: Karnataka Commercial Tax Department - ct.kar.nic.in

West Bengal

West Bengal calculates PT on annual salary. Due date: 21st of the following month for monthly PTRC filers. Note: West Bengal employers who pay late face 1% per month interest plus a penalty of up to 50% of the amount due.

Tamil Nadu

Tamil Nadu deducts Professional Tax on a half-yearly basis - for April to September salaries in August, and for October to March salaries in January. Slabs are based on the half-year salary. Due dates: October 31 (for April-September) and April 30 (for October-March).

Source: Tamil Nadu Commercial Taxes Department - tnvat.gov.in

Andhra Pradesh and Telangana

Due date: 10th of the following month for employers. Annual PT: maximum Rs 2,400.

Due Date Summary

How to Register for Professional Tax (PTRC/PTEC)

• Step 1: Identify all states where your employees physically work - register in each state separately
• Step 2: Visit the respective state's Commercial Tax or Labour Department portal
• Step 3: Register for PTRC (employer) and PTEC (self/company) separately if required
• Step 4: Submit required documents: PAN of the business, address proof, Certificate of Incorporation (for companies), list of directors/proprietors, and employee details
• Step 5: Pay the applicable enrollment fee (varies by state - typically Rs 1,000 to Rs 2,500)
• Step 6: Receive your PTRC/PTEC registration number - begin deducting and remitting PT from the month of registration

Penalties for Non-Compliance

• Karnataka: Interest at 1.25% per month on late payment plus penalty of up to 50% of the tax due
• Maharashtra: Rs 5 per day for late registration; 10% penalty on tax due plus interest for late payment
• West Bengal: 1% per month interest plus penalty up to 50% of the amount due
• Kerala: Rs 5,000 fine for non-registration plus 1% per month interest on unpaid PT
• General: In most states, persistent non-compliance can result in attachment of bank accounts and legal proceedings against the employer

Multi-State Employers: Practical Advice for 2026

If your company has employees in multiple PT states - for example, a startup with staff in Bengaluru, Mumbai, and Hyderabad - you must maintain separate PTRC registrations and pay PT under each state's rules independently. Payroll systems must be configured to apply the correct state's slabs based on each employee's physical work location, not the company's registered office.

A company registered in Delhi (which has no PT) but with employees in Noida (Uttar Pradesh) must apply UP's rules. UP does not levy Professional Tax - so those employees are exempt. But employees working from a Bengaluru office are subject to Karnataka's PT of Rs 200/month.

How Targolegal Can Help

Our Targo HR and Targo License services handle Professional Tax registration (PTRC and PTEC), monthly/half-yearly PT filing, and multi-state PT compliance for companies with distributed teams. We integrate PT correctly into your payroll structure so the right amount is deducted, remitted, and reported - across every state where your employees work.

Contact Targolegal to set up your Professional Tax compliance today.