Glossary · Compliance & Registrations
Professional Tax
A state-level tax on professionals, traders, and employees, levied under the State List (Entry 60) of the Constitution.
Professional tax is deducted from employees' salaries by employers and deposited with the state government. Rates and slabs differ widely — Karnataka charges ₹200/month for employees earning above ₹15,000, while Maharashtra has graduated rates up to ₹200/month for income above ₹10,000. Some states (Delhi, Haryana) do not levy it. Maximum cap is ₹2,500 per year as per the Constitution (Article 276). The employer can deduct it from salary or bear it, depending on the agreement.
Examples
An employee earning ₹50,000 a month in Karnataka has ₹200 deducted as professional tax each month, totalling ₹2,400 a year.