Professional Tax State-Wise Rates India 2026 — Complete Employer Guide

Which states levy professional tax — and which do not

The single most common question employers ask is simply whether professional tax applies in a given state. The answer matters because PT registration, deduction and deposit obligations arise only in levying states — and payroll teams routinely make errors in both directions: deducting PT where none is due, or missing registration in a state where a single remote employee triggers liability. The reference table below, verified by the TMS compliance team for FY 2026-27, settles the applicability question at a glance.

A practical point that trips up growing companies: applicability follows the employee's place of work, not your registered office. A Mumbai-headquartered company with a remote hire in Jaipur deducts no PT for that employee — but a Delhi company with three staff in Bengaluru must register in Karnataka and deduct there. For exact slab-wise deduction amounts for any levying state, use the TMS professional tax calculator, which is kept current with state notifications.

What has changed for FY 2026-27

Professional tax looks static because the constitutional annual ceiling of Rs 2,500 has not moved, but the operational detail underneath it keeps shifting. Three changes matter for the 2026-27 payroll year:

• Karnataka's revised exemption threshold. Karnataka raised its monthly salary exemption limit with effect from April 2025, taking a large band of lower-salaried employees out of PT entirely. Payrolls still deducting on the old slab are over-deducting — check current figures on the professional tax calculator before the first payroll of the financial year.
• Maharashtra deadline restructuring. Maharashtra has revised its PTEC payment and PTRC return timelines during 2025-26. If your compliance calendar still carries the older month-end deposit dates, refresh it — a deposit that was on time last year can be late this year. The HR compliance calendar 2026 tracks current state-wise due dates.
• GST-linked enrolment scrutiny. Karnataka now expects every GST-registered entity to hold PT enrolment regardless of headcount, and other states are cross-matching GST and PT registers. Entities that registered for GST but never enrolled for PTEC are being identified automatically — voluntary enrolment is far cheaper than a notice.

Professional tax in a multi-state payroll operation

For a company with employees in five or six levying states, PT is rarely difficult in any one state — the risk is aggregation. Each state has its own portal, return frequency, slab structure and penalty regime, and the four Labour Codes in force since November 2025 have not subsumed PT: it remains a state fiscal levy outside the Codes, so it must be tracked as a separate compliance stream alongside PF, ESI and LWF. In practice this means one missed state portal migration or one unregistered branch can sit undetected for years, accumulating interest month on month. Companies typically address this in one of two ways: building an internal state-wise tracker with named owners per state, or folding PT into a managed payroll outsourcing arrangement where registration, deduction, deposit and returns across all states sit with one accountable partner. TMS manages multi-state PT as part of its broader statutory compliance services, with every rate and deadline verified by the TMS compliance team before each payroll cycle.

Frequently asked questions

Is professional tax applicable in Rajasthan?

No. Rajasthan does not levy professional tax, and there is no PT registration or deduction obligation for employees working in the state. If a payroll vendor is deducting PT for Rajasthan-based staff, that deduction is incorrect and should be stopped and refunded.

Is there professional tax in Uttar Pradesh?

No. Uttar Pradesh does not levy professional tax as of FY 2026-27, despite periodic media speculation about its introduction. Employers with UP-based employees deduct nothing under this head; any change would require a state enactment, which the TMS compliance team monitors.

What is the professional tax slab in Madhya Pradesh for 2026-27?

Madhya Pradesh levies PT on a tiered monthly structure within the Rs 2,500 annual ceiling, with a distinctive month-wise collection pattern that differs from most states. Because MP periodically adjusts its slabs, use the professional tax calculator for the current verified deduction amounts rather than relying on last year's payroll settings.

Have Maharashtra's professional tax slabs changed for 2026-27?

The slab structure shown in the tables above continues to apply, but Maharashtra has revised filing and payment timelines and maintains a higher exemption threshold for women employees. Verify both the slab and the current due dates before your April payroll run.

Who has to register for professional tax?

In levying states, two registrations apply: PTRC for the employer's obligation to deduct and deposit PT from salaries, and PTEC for the entity's (and directors' or partners') own liability. Registration is generally required within 30 days of becoming liable, and each operating state needs its own registration.

Operating across multiple PT states? Talk to the TMS compliance team for a state-wise PT health check.