Professional Tax: State-Wise Rates in India

Professional tax is the smallest tax on your payslip — typically Rs. 200/month — but it appears in every state with a different slab structure, different exemption thresholds, and different rules about who owes it. This guide gives current rates for every major Indian state, who is liable, and the income-tax deduction you can claim.

What is professional tax?

Professional tax (PT) is a state-level tax levied under Article 276 of the Constitution. It applies to salaried employees, professionals, and businesses — collected by the State government, not the Centre.

The Constitution caps professional tax at Rs. 2,500 per year per person. Most states levy a slab structure that respects this ceiling, with rates increasing with income.

Not every state levies it. Some major states with no professional tax: Delhi, Haryana, Uttar Pradesh, Rajasthan, Uttarakhand, Punjab.

State-wise professional tax rates (2026)

Rates are typically slab-based. The figures below show a simplified mid-bracket rate for salaried individuals:

Slab boundaries shown are indicative. Always verify with your state's commercial tax department portal.

Who pays it

The PT is paid by:

• Salaried employees: Deducted by employer from monthly salary, deposited with state tax department. Appears on your payslip and Form 16.
• Self-employed professionals (lawyers, CAs, doctors, freelancers): Pay directly to the state via the PT portal, typically half-yearly or annually.
• Businesses and partnerships: Each partner pays based on their share of profits.

Income tax deduction

Professional tax paid is deductible from your taxable salary under Section 16(iii) of the Income Tax Act. Your employer typically does this automatically in Form 16 Part B — your "Income chargeable under Salaries" is already net of PT.

The deduction is the actual PT paid in the FY (capped at Rs. 2,500). For a 30%-slab employee paying Rs. 2,400 of PT, the actual tax saved is roughly Rs. 750.

The PT deduction is allowed under both Old and New tax regimes.

Exemptions

Most states exempt:

• Persons with permanent disability (40%+ certified)
• Senior citizens (65+ in some states, 60+ in others)
• Parents of disabled children (some states)
• Members of armed forces (CAPF too in some states)
• Charitable institutions and educational establishments below certain income thresholds