Payroll & statutory · Updated September 2026
Professional tax is a small tax on employment income levied by state governments, not the centre. Despite the name it has nothing to do with being a professional; anyone earning a salary in a state that levies it pays it. The employer deducts it from salary each month and deposits it with the state. The Constitution caps it at Rs 2,500 per person per year.
Roughly half of them. Karnataka, Maharashtra, West Bengal, Tamil Nadu, Andhra Pradesh, Telangana, Gujarat and Madhya Pradesh are among those that do. Delhi, Uttar Pradesh, Haryana, Rajasthan and the union territories generally do not. Because each state writes its own schedule, the slabs and the monthly amounts differ, and a multi-state employer has to run a different deduction table for each location.
Each state publishes a slab table by monthly gross salary. As an illustration, Karnataka charges a flat Rs 200 a month once monthly salary crosses Rs 25,000, and nil below it. Maharashtra runs a stepped table topping out at Rs 200 a month, with Rs 300 in one month to make the annual figure Rs 2,500. The employer deducts the slab amount, shows it on the payslip, and files monthly or annual returns depending on the state and the size of the liability. Professional tax paid is deductible from salary income under Section 16 in both tax regimes.
No. The rate, the slabs and even whether it applies at all depend on the state where you work, not where the company is headquartered.
No. Rs 2,500 per person per year is the constitutional ceiling across all states combined.
Generally the rule follows your place of work or the office you are attached to. Employers usually apply the schedule of the state where your work location is registered.
Check your monthly figure with the Professional Tax Calculator, and see the combined effect of all statutory deductions in the Take-Home Salary Calculator. Multi-state compliance is a core reason to run proper payroll software.