Professional Tax is a state-level tax on income from any profession, trade, calling, or employment, levied by about fifteen states and capped at Rs. 2,500 a year per person. Businesses and professionals obtain a PTEC to pay their own tax, and employers obtain a PTRC to deduct and deposit tax from employees’ salaries. Because it is state-specific, the rules and slabs differ from state to state. Samkhya handles your PT registration and returns.
Professional Tax is levied by state governments under the authority of Article 276 of the Constitution on persons earning an income through a profession, trade, calling, or employment. The maximum any state can charge is Rs. 2,500 a year per person, with slabs based on income. It is levied in roughly fifteen states, including Maharashtra, Karnataka, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Gujarat, and Madhya Pradesh, and is not levied in states such as Delhi, Haryana, Uttar Pradesh, Punjab, and most of the North-East. There are two registrations: a PTEC (Enrolment Certificate), through which a business, professional, or director pays its own professional tax, and a PTRC (Registration Certificate), through which an employer deducts and remits tax from employees’ salaries.
PT registration is important for several reasons:
PT registration is required in these situations:
Professional tax involves two certificates:
PT registration applies to:
Professional Tax is administered by the commercial tax or professional tax department of each state, and registration is done on the relevant state portal. The applicant applies for a PTEC, a PTRC, or both, providing the business and promoter details and employee information, and the department issues the certificate after verification. The employer then deducts PT from employees according to the state’s salary slabs, deposits it, and files returns at the frequency the state prescribes (monthly, quarterly, or annually). Some states, such as Maharashtra, offer a composition option to pay a lump sum in place of several years’ enrolment tax.
For the Business:
For the Promoters and Employees:
PT registration follows a clear sequence:
Registering for professional tax with Samkhya Corporate Services is simple. Just follow these easy steps:
From there, our team obtains the certificates and sets up your deductions and returns.
A PT-registered employer must keep up with compliance:
Professional tax is charged in slabs based on monthly salary or income, and the total for any person in a year cannot exceed the constitutional cap of Rs. 2,500. Each state sets its own slabs and exemptions, so the amount differs from state to state. Maharashtra, for example, reaches the Rs. 2,500 annual figure by deducting Rs. 200 a month for eleven months and Rs. 300 in February, while many states have lower slabs starting around Rs. 110 a year. A company typically pays a fixed PTEC amount for itself (often Rs. 2,500 a year) and deducts PTRC amounts from employees according to their salary band. Professional tax paid is allowed as a deduction while computing income under the Income Tax Act, which softens its cost. States that do not levy professional tax, such as Delhi and Haryana, require no PT deduction at all.
| Feature | PTEC | PTRC |
| Full Name | Enrolment Certificate. | Registration Certificate. |
| Who Needs It | Business, professional, or director. | Employer with employees. |
| Purpose | Pay PT on own account. | Deduct and remit employees’ PT. |
| Amount | Often a fixed annual sum. | Based on employee salary slabs. |
| Returns | Usually an annual payment. | Periodic returns of PT deducted. |
| Cap | Rs. 2,500 per person per year. | Rs. 2,500 per employee per year. |
What is professional tax?
It is a state-level tax on income from a profession, trade, calling, or employment, levied by about fifteen states and capped at Rs. 2,500 a year per person.
What is the difference between PTEC and PTRC?
A PTEC lets a business, professional, or director pay its own professional tax, while a PTRC lets an employer deduct and deposit professional tax from employees’ salaries.
Which states levy professional tax?
States such as Maharashtra, Karnataka, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Gujarat, and Madhya Pradesh levy it, while Delhi, Haryana, Uttar Pradesh, and Punjab, among others, do not.
What is the maximum professional tax?
The most any state can charge is Rs. 2,500 a year per person, though many states have lower slabs.
Do I need to register in every state?
Yes. Professional tax is state-specific, so a business operating in several applicable states registers and complies in each one.
Is professional tax deductible?
Yes. Professional tax paid is allowed as a deduction while computing income under the Income Tax Act.
