Overview
What is professional tax?
Professional tax is a tax that some Indian states charge on earning a living from employment, a profession, a trade or a calling. It is a state tax, so each state that levies it has its own law, rates, due dates and portal. Some states do not levy it at all.
The Constitution caps the total professional tax any one person can be charged in a year. Within that cap, each state sets its own slabs.
As an employer
Deducting from salaries
In a state that levies professional tax, an employer deducts it from the salaries of employees who work there and pays it to the state. The employer registers for this and files returns for the amounts deducted.
The rules of the state where each employee works generally apply, so a business with staff in more than one such state may need to register in each.
On your own account
The business's own liability
In many of these states, a company, an LLP, the partners of a firm, directors, self-employed professionals and proprietors can also owe professional tax in their own right, usually as a fixed yearly amount. This needs a separate enrolment.
This is the part businesses most often miss, because no payslip shows it.
Registration
How professional tax registration works
States that levy professional tax usually keep two registrations: one for an employer that deducts from employees, and one for a person or business liable on its own account. Each state uses its own names for them. Maharashtra, for example, calls them PTRC and PTEC.
Registration is made online on the state's tax portal, usually within a set time after the liability starts. The time limit differs from state to state.
Payments and returns
Professional tax compliance after registration
Employer deductions
Deduct each month by the employee's salary slab, pay it to the state and file the return on the state's schedule, which may be monthly or longer.
Own-liability payment
Pay the fixed yearly amount for the business, and for partners or directors where they are liable, by the state's due date.
Payslips and records
Show the deduction on each payslip and keep the payment and return records.
Rate changes
States change slabs in their budgets. Check the current rates each April.
States
States where we handle professional tax
We handle professional tax registration, payments and returns. Tell us your state and we confirm availability for your state, and the rules that apply, before you start.
Documents
Documents usually needed
- PAN of the business
- Certificate of incorporation, partnership deed or other proof of the business
- Proof of the business address in the state
- PAN, ID and address proof of the directors, partners or proprietor
- Employee and salary details, for employer registration
- Bank account details
Each state's portal sets its own list. We confirm it for your state before we file.
Our service
What our professional tax service covers
- Checking which registrations apply to your business
- Employer registration and own-liability enrolment
- Payments and returns on the state's schedule
Contact our team for the fee for registration and for ongoing payments and returns.
Get free consultationPenalties
What happens if professional tax is missed
Each state's law sets its own penalties and interest. The amounts differ by state.
Not registered
A penalty can apply for failing to register when liable.
Late payment
Interest and a penalty can apply on tax paid late.
Return not filed
A late fee or penalty can apply for each return filed late or not filed.
Past dues
Back tax for earlier years can come up at a late enrolment or an assessment.
Process
How professional tax works with Complianto
- 01
Fill the form
Tell us your business type, the states you operate in and how many employees work in each.
- 02
Check what applies
We confirm which registrations your business needs in each state.
- 03
Share documents
Send the documents for your state. We check them before we file.
- 04
Registration filed
We apply on the state's portal and share the registration once issued.
- 05
Ongoing compliance
We help you pay and file on the state's schedule.
What is professional tax?
A state tax on earning a living from employment, a profession, a trade or a calling. Only some states levy it, each under its own law.
What is the maximum professional tax?
The Constitution sets a yearly cap on the total professional tax on any one person. We confirm the current figure for your case.
Does every state charge professional tax?
No. Some states do not levy it. Whether you owe it depends on where your business operates and where your employees work.
Who deducts professional tax from salaries?
The employer, in a state that levies it. The employer registers, deducts by the salary slab and pays the tax to the state.
Does a company pay professional tax itself?
In many states that levy it, yes. A company, an LLP, partners and directors can owe a fixed yearly amount on their own account, which needs a separate enrolment.
Our staff work in more than one state. What applies?
Generally, the rules of the state where each employee works. You may need to register in each state that levies the tax.
Is professional tax deductible for income tax?
For a salaried employee, professional tax paid is deducted when working out income from salary. See our income tax return service.
What happens if we register late?
A penalty can apply, and the state may ask for tax for the earlier period in which you were already liable.
Is Complianto a government body or a CA firm?
Neither. Complianto is a compliance facilitation platform operated by Mentorcorp Private Limited. You can also register directly on your state's tax portal without our fee.
More services
Other services you may need
PF Registration and Compliance
Monthly PF for your employees.
ESI Registration and Compliance
Health cover contributions for staff.
TDS Return Filing
Quarterly returns for tax deducted on salary.
Bookkeeping and Accounting
Payroll records kept in order.
GST Registration
Register your business for GST.
Annual Compliance
Yearly ROC filings for a company.
