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Professional Tax
Professional Tax services by Verslas Guru — expert CA, CS, advocate, engineer and AI-assisted registration and compliance.
Overview
The state government levies a professional tax, which must be paid by the employer, the employee, and the professional. Employees who operate in an organization or facility, such as a factory, must also go through the professional tax registration process.
Professional tax registration is required for businesses within 30 days of hiring employees and for professionals within 30 days of establishing their practice and must be withheld from the paid salary or compensation. Also, Professional tax, varies from state to state and is capped at ₹2500 per year. If you have employees in more than one state, professional tax registration is required in each state.
States/Union Territories in which Professional Tax is applicable
- Andhra Pradesh
- Karnataka
- Maharashtra
- Tamil Nadu
- Assam
- Kerala
- Meghalaya
- Tripura
- Bihar
- Jharkhand
- Madhya Pradesh
- West Bengal
- Manipur
- Mizoram
- Odisha
- Puducherry
- Sikkim
- Telangana
- Nagaland*
- Chhattisgarh
- Gujarat
How Verslas Guru Helps
- Determine your state-specific Professional Tax obligation
- Complete Professional Tax registration with the state authority
- Draft and file monthly/annual returns on your behalf
- Ensure correct deductions from employee salaries each payroll cycle
- Handle notices, amendments, and compliance updates
Frequently Asked Questions
Professional Tax applies to salaried employees, self-employed professionals (doctors, lawyers, CAs, architects, etc.), and business owners in states that have enacted Professional Tax legislation. The obligation to deduct and remit Professional Tax from employees' salaries rests with the employer.
No. Professional Tax is a state-level levy and is not applicable in all states. It is currently levied in states including Maharashtra, Karnataka, West Bengal, Andhra Pradesh, Tamil Nadu, Telangana, Gujarat, Madhya Pradesh, Odisha, and several others. States like Delhi, Rajasthan, Uttar Pradesh, and Haryana do not impose Professional Tax.
The Constitution of India caps Professional Tax at ₹2,500 per person per financial year. The exact amount varies by state and is typically structured as a slab based on monthly salary. For example, in Maharashtra, employees earning above ₹10,000 per month pay ₹200/month (₹2,400/year), with February being ₹300.
Non-compliance attracts penalties, interest, and in some states, prosecution. Employers must register within 30 days of hiring employees, deduct Professional Tax from salaries each month, and remit it to the state authority within the prescribed timeline. Verslas Guru handles end-to-end Professional Tax registration and compliance to keep your business penalty-free.
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