AS | Ankit Sarawagi|Founder, CFOmatrix·August 2026·9 min read | Payroll & Labour Law |
Professional tax is the small deduction on a payslip that most founders ignore, until they open an office in Maharashtra or Karnataka and discover the business itself owes it, whether or not it has a single employee there.
This guide covers professional tax registration end to end: what it is, the two certificates you may need (PTEC and PTRC), how slabs differ by state, and how to file and pay. It is a state tax, so the details vary. We will show you the shape of the rules with real numbers, then tell you exactly what to confirm for your own state.
- When it applies
- Only in states that levy it (Maharashtra, Karnataka, West Bengal, Tamil Nadu, Telangana, Gujarat and others). Not in Delhi, Haryana, UP, Rajasthan or Uttarakhand.
- Amount
- Capped by the Constitution at ₹2,500 per person per year. Slabs set by each state.
- Where to register
- The state commercial tax or professional tax portal. Take PTEC (your own liability) and PTRC (to deduct from staff).
- Filing & due date
- Monthly, half-yearly or annual depending on the state (many states: deposit by the 21st of the next month).
- Penalty
- Interest plus penalty on late payment, and a per-day or fixed fine for late registration and returns.
1 What professional tax actually is
Professional tax is a tax on employment, trade and profession, charged by state governments and, in some states, by local municipal bodies. It has nothing to do with income tax. It is a separate, small levy that a state is allowed to collect from anyone who earns a living within it.
Because it is a state subject, one national rule does not exist. The only common ceiling is set by the Constitution: no state can charge one person more than ₹2,500 in a year. Everything else, the slabs, the thresholds, the exemptions and the filing dates, is decided state by state.
2 Which states levy it, and which do not
The first question is not “how much” but “does my state charge it at all”. If your whole team sits in a non-levying state, you have nothing to register.
| Levies professional tax (examples) | Does NOT levy it (examples) |
|---|---|
| Maharashtra, Karnataka, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Gujarat, Madhya Pradesh, Kerala, Odisha, Assam | Delhi, Haryana, Uttar Pradesh, Rajasthan, Uttarakhand, Himachal Pradesh, Goa, and most Union Territories |
What matters is the state where the employee works, not where your company is registered. A Bengaluru-registered company with a remote employee in Delhi owes no professional tax on that person, and a Delhi-registered company with staff in its Pune office does owe it there.
3 PTEC vs PTRC: the two certificates
This is the part that trips up most founders. In a professional-tax state you usually need both certificates, and they do different jobs.
| PTEC | PTRC | |
|---|---|---|
| Full name | Professional Tax Enrolment Certificate | Professional Tax Registration Certificate |
| Who it covers | The business’s own liability (and, in some states, directors or partners) | The employees whose salaries you deduct from |
| What you pay | A flat annual amount (commonly ₹2,500) for the entity existing | The tax deducted from each employee, deposited to the state |
| When | Usually once a year | On the state’s filing cycle (monthly, half-yearly or annual) |
The clean way to remember it: PTEC is what the company owes for being a company. PTRC is what the company collects from its people and passes on. A one-person company with no staff may still need PTEC. The moment it hires in that state, it also needs PTRC.
Brewly, a coffee-subscription startup, incorporates in Maharashtra and runs for four months with only its two founders drawing salary. It takes a PTEC and pays the flat ₹2,500 for the entity. In month five it hires three baristas and a manager on payroll in Pune. Now it also needs a PTRC to deduct professional tax from those four salaries and deposit it every month.
4 How the slabs work, with example states
Every levying state publishes its own slab. To show how different they can be, here are four common ones. Read them as a shape, not as a rulebook for your state.
| State | How it charges (illustrative) |
|---|---|
| Maharashtra | Men: nil up to ₹7,500/month, then ₹200/month (₹300 in February) above ₹10,000. Women: nil up to ₹25,000/month, then ₹200/month. Annual total reaches the ₹2,500 cap. |
| Karnataka | Nil below ₹25,000/month; ₹200/month at ₹25,000 and above (threshold raised from ₹15,000 with effect from April 2025). |
| West Bengal | Graded bands: nil up to ₹10,000/month, then roughly ₹110, ₹130, ₹150 and ₹200/month as salary rises past ₹40,000. |
| Tamil Nadu | Charged half-yearly on average income (Greater Chennai Corporation): nil up to ₹21,000, then ₹180, ₹425, ₹930, ₹1,025 and ₹1,250 per half-year in higher bands. |
Notice how little they have in common: Maharashtra splits by gender, Karnataka has a single high exemption, West Bengal grades in steps, and Tamil Nadu does not even use months. That is why a payroll rule that is correct in Mumbai is wrong in Chennai.
Kaveri Labs runs payroll in Maharashtra for three people:
- Ravi, salary ₹60,000/month (male): above ₹10,000, so ₹200 a month for April to January, then ₹300 in February. Year total: (₹200 x 11) + ₹300 = ₹2,500.
- Priya, salary ₹30,000/month (female): above the ₹25,000 women’s threshold, so ₹200/month with the February top-up. Year total: ₹2,500.
- Anita, salary ₹20,000/month (female): below the ₹25,000 women’s threshold, so nil professional tax.
Kaveri deducts ₹400 in a normal month (Ravi + Priya) and ₹600 in February, deposits it under its PTRC, and separately pays its own ₹2,500 under PTEC.
5 Registering: the steps
Registration is online in most states, through the state commercial tax or professional tax portal. The flow is broadly the same everywhere.
6 Filing and paying on time
Once registered, the recurring job is small but must be on schedule. The cycle depends on your state and the size of your liability.
| State type | Typical cycle | Common due date |
|---|---|---|
| Maharashtra (PTRC) | Monthly (or annual for small liability) | By the last day of the next month for monthly filers |
| West Bengal | Monthly deposit, annual return | Deposit by the 21st of the next month |
| Karnataka | Monthly | By the 20th of the next month |
| Tamil Nadu | Half-yearly | Around August and January (per local body) |
PTEC, the entity’s own liability, is usually a single annual payment (commonly by 30 June in Maharashtra, for instance). Put both dates in your compliance calendar with a named owner, exactly as you would for TDS and GST.
7 Your professional tax checklist
- List every state where you have an office or an employee working.
- For each, confirm whether it levies professional tax and pull the current slab.
- Take a PTEC for the entity in each levying state, and pay the annual amount.
- Take a PTRC in each levying state where you run payroll.
- Configure payroll with the correct state slab, including any women’s exemption or half-yearly rule.
- Add every deposit and return due date, PTEC and PTRC, to your compliance calendar with an owner.
- Re-check slabs each year, since states revise thresholds (as Karnataka did in 2025).
Not sure which states you owe professional tax in?
Use our free Compliance Applicability Checker: enter your team size, states and set-up, and see exactly which payroll and labour filings, including professional tax, apply to you now and as you grow.
Check my compliances8 FAQs
What is the difference between PTEC and PTRC?
Which states in India do not levy professional tax?
What is the maximum professional tax a person can pay in a year?
Do professional tax slabs vary by state?
How often must an employer file professional tax returns?
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AS | Founder, CFOmatrix | Finance Strategy & Compliance CFOmatrix helps Indian startups build finance, tax and compliance functions that stand up to investor due diligence, from process and controls to the filings and the numbers behind them. |
Disclaimer: This article is general information as of August 2026 and is not tax or legal advice. Professional tax is a state levy and its slabs, thresholds and due dates vary by state and local body and can change. Confirm your specific obligations with a qualified professional before acting.