Professional Tax: Complete State-wise Registration Guide
Professional Tax (PT) is a state-level tax levied on income earned through profession, employment, trade, or calling. While it is deductible under the Income Tax Act, compliance is mandatory in applicable states. Understanding your state's Professional Tax regulations is crucial for avoiding penalties and maintaining good standing with state tax authorities.
This comprehensive guide covers everything you need to know about Professional Tax registration, including state-wise applicability, registration procedures, payment schedules, and compliance requirements for both employers and professionals.
Understanding Professional Tax
Professional Tax is governed by Article 276 of the Constitution of India, which empowers state governments to levy and collect tax on professions, trades, callings, and employments. Key characteristics include:
- • Maximum annual tax capped at ₹2,500 per person across all states
- • Deductible under Section 16(iii) of the Income Tax Act
- • Levied by state governments, not the central government
- • Mandatory registration for employers and certain professionals
- • Monthly, quarterly, or annual payment based on state rules
State-wise Applicability
States with Professional Tax (22 States/UTs)
- • Andhra Pradesh
- • Assam
- • Bihar
- • Chhattisgarh
- • Gujarat
- • Jharkhand
- • Karnataka
- • Kerala
- • Madhya Pradesh
- • Maharashtra
- • Manipur, Meghalaya, Mizoram, Nagaland
- • Odisha, Puducherry, Punjab, Sikkim
- • Tamil Nadu, Telangana, Tripura, West Bengal
States WITHOUT Professional Tax
- • Arunachal Pradesh
- • Delhi
- • Goa
- • Haryana
- • Himachal Pradesh
- • Jammu & Kashmir
- • Ladakh
- • Rajasthan
- • Uttar Pradesh
- • Uttarakhand
Businesses in these states do not need PT registration.
Who Needs to Register?
Employers (PTRC Registration)
Any employer who pays salary/wages to employees in a state where PT is applicable must obtain a Professional Tax Registration Certificate (PTRC). The employer must:
- • Deduct PT from employees' salaries
- • Deposit the deducted amount to the state government
- • File periodic returns
- • Issue PT certificates to employees
Professionals & Business Owners (PTEC Registration)
Individuals engaged in profession, trade, or calling must obtain a Professional Tax Enrollment Certificate (PTEC):
- • Doctors, lawyers, chartered accountants
- • Consultants and freelancers
- • Business owners and traders
- • Company directors and partners
State-wise PT Rates (Monthly)
| State | Salary Up to ₹10K | ₹10K - ₹15K | ₹15K - ₹25K | Above ₹25K |
|---|---|---|---|---|
| Maharashtra | Nil | ₹175 | ₹200 | ₹200 (₹300 in Feb) |
| Karnataka | Nil | Nil | ₹200 | ₹200 |
| Tamil Nadu | Nil | Nil | ₹150 | ₹200 |
| Gujarat | Nil | Nil | ₹150 | ₹200 |
| West Bengal | Nil | ₹110 | ₹130 | ₹200 (₹210-₹300) |
Registration Process
Check Applicability
Verify if Professional Tax applies in your state. If you're in a non-PT state, registration is not required.
Determine Registration Type
Apply for PTEC if you're a professional/business owner paying PT on your own income. Apply for PTRC if you're an employer deducting PT from employees.
Online Application
Visit your state's commercial tax portal (e.g., MTR for Maharashtra, K2 for Karnataka). Create an account and fill the registration form with business details, PAN, address proof, and bank details.
Document Submission
Upload required documents including PAN card, address proof, incorporation certificate (for companies), photographs, and employee details (for PTRC).
Payment and Certificate
Pay the registration fee (varies by state from ₹500 to ₹2,000). After verification, download your Professional Tax Registration Certificate (PTRC) or Enrollment Certificate (PTEC).
Payment and Return Filing
Payment Frequency
- Monthly: Maharashtra (if tax liability > ₹50,000)
- Quarterly: Most states for regular taxpayers
- Annual: Some states for small taxpayers
- Due Date: Generally by last day of the following month
Return Filing
- • Monthly returns for employers with many employees
- • Quarterly returns for small employers
- • Annual returns for self-employed professionals
- • Nil returns mandatory even if no tax liability
Penalties for Non-Compliance
| Violation | Penalty (Varies by State) |
|---|---|
| Non-registration | ₹500 - ₹5,000 + ₹5/day delay |
| Late payment | Interest @ 1-2% per month + penalty |
| Non/late filing of returns | ₹100 - ₹500 per return |
| False information | Up to 3x tax amount |
Income Tax Deduction Benefit
Professional Tax paid is deductible under Section 16(iii) of the Income Tax Act:
- • Deduction available in the year of actual payment
- • No ceiling on deduction amount (subject to actual PT paid)
- • Available to both salaried and self-employed individuals
- • Reduces taxable salary income
Example: If your annual salary is ₹8,00,000 and you paid ₹2,500 as PT, your taxable salary becomes ₹7,97,500.
Compliance Checklist
For Employers
- ✓ Obtain PTRC registration
- ✓ Deduct PT from employee salaries
- ✓ Deposit tax by due date
- ✓ File periodic returns
- ✓ Issue PT certificates to employees
For Professionals
- ✓ Obtain PTEC registration
- ✓ Calculate annual PT liability
- ✓ Pay tax as per state schedule
- ✓ File annual returns
- ✓ Claim deduction in ITR