Professional Tax: Definition, Meaning & Guide for Indian Businesses

Professional Tax is a state-level tax on income from profession, trade or employment. Rates and thresholds vary by state. Maximum ₹2,500/year per person.

What is Professional Tax?

Professional Tax (PT) is levied by State governments under Article 276 of the Constitution. Maximum ₹2,500/year per person. Rates and thresholds vary: Maharashtra ₹200/month for ₹10,000+ salary; Karnataka ₹200/month for ₹15,000+; West Bengal slab-based. Employers deduct PT from employee salary and pay to the state. Not applicable in Delhi, UP, Haryana, Bihar, Rajasthan and several other states. Failure to deduct: penalty + interest at state-specific rate.