Professional Tax Calculator

What is Professional Tax?

Professional Tax is a state-level tax levied on income earned by way of profession, trade, calling, or employment. It is imposed by state governments under Article 276 of the Indian Constitution. The maximum Professional Tax payable by any person is ₹2,500 per year.

Professional Tax is deducted by the employer from the employee's salary every month and deposited with the respective state government. Self-employed individuals must register and pay Professional Tax directly to the state government.

Who Pays Professional Tax?

• Salaried employees — Employer deducts PT from salary and deposits it with the state.
• Self-employed professionals — Doctors, lawyers, chartered accountants, consultants, etc., must register and pay PT themselves.
• Business owners — Partners, proprietors, and directors of companies are liable to pay PT.
• Freelancers — Freelancers earning above the state threshold must register for PT.

PT Deduction Rules

Professional Tax is calculated based on the gross salary (before any deductions). It is deducted monthly from the salary and the employer must deposit it with the state government within the prescribed due date (usually the 15th of the following month). Employers must also obtain a Professional Tax Registration Certificate (PTRC) and file monthly/annual returns.

Professional Tax paid is allowed as a deduction from salary income under Section 16(iii) of the Income Tax Act. This deduction is available for both old and new tax regimes. The actual amount deducted from salary reduces your taxable income, providing a small tax benefit.

States That Do Not Levy PT

Several states and union territories do not levy Professional Tax, including Delhi, Rajasthan, Uttar Pradesh, Haryana, Punjab, Himachal Pradesh, Uttarakhand, Jammu & Kashmir, Ladakh, Chandigarh, and several North-Eastern states. If you work in these states, no Professional Tax is applicable.