What is Professional tax?
Short answer
Professional tax is a state tax on salaried employees, capped by the Constitution at ₹2,500 a year. Each state sets its own slabs, and some states do not charge it on salary.
What to know
- The amount depends on the state where the employee works, not where the company is registered.
- Some states measure monthly salary, some half-yearly or yearly salary, and some charge a higher amount in one month so the year totals a round figure.
- Delhi, Haryana, Uttar Pradesh, Rajasthan, Himachal Pradesh, Uttarakhand and Goa do not levy it, and Chhattisgarh exempts salaried employees.
In AdviHR
AdviHR applies each state’s slabs by the employee’s work state, including Maharashtra’s separate slab for women and the higher instalment month. Always confirm a state’s rates against its current notification.
Frequently asked questions
What is the maximum professional tax?
₹2,500 per person per year.
Who pays professional tax to the state?
The employer deducts it from salary and pays it to the state, on the state’s due dates.
Related terms
How sure are we? These figures use the same rules AdviHR payroll applies. We publish what has been checked against an official source and what has not, on the statutory accuracy page.
General information, not legal or tax advice. Confirm against the official notification and your adviser.