Last reviewed: 20 July 2026. Professional tax is the small tax that causes outsized confusion, because it is a state subject: some states charge it, some do not, and every state that does has its own slabs, forms and portals. Article 276 of the Constitution permits the levy and caps it at Rs 2,500 per person per year. Here is the whole map — what it is, where it applies, Maharashtra in depth, and how multi-state and remote teams should handle it.
PTEC vs PTRC — the distinction that decides your registrations
| PTEC (Enrolment) | PTRC (Registration) | |
|---|---|---|
| Who it covers | The entity or professional ITSELF — company, LLP, firm, director, freelancer | The entity as an EMPLOYER deducting from staff salaries |
| Amount | Fixed — Rs 2,500 p.a. in Maharashtra | Slab-wise per employee, deducted monthly |
| When needed | Within 30 days of starting business/profession | Before the first salary payment |
| Typical trap | “We have no employees, so no PT” — wrong; the entity itself owes PTEC | Hiring in another PT state without registering there |
Which states levy professional tax — and which do not
| Position | States |
|---|---|
| Levy PT (major) | Maharashtra, Karnataka, West Bengal, Gujarat, Madhya Pradesh, Andhra Pradesh, Telangana, Tamil Nadu, Kerala, Odisha, Bihar, Jharkhand, Assam, Meghalaya, Tripura, Sikkim, Manipur, Mizoram (a few others, e.g. Chhattisgarh, Nagaland and Puducherry, levy under their own enactments) |
| No PT | Delhi, Uttar Pradesh, Haryana, Punjab, Rajasthan, Uttarakhand — and most union territories |
Rates and administration differ state to state (Tamil Nadu and Kerala, for instance, administer it through local bodies on a half-yearly cycle). Always confirm against the specific state Act before setting up payroll — the table above is the orientation map, not a substitute for the statute.
Maharashtra in depth — the state most of our readers operate in
| Monthly salary | PT — men | PT — women |
|---|---|---|
| Up to Rs 7,500 | Nil | Nil |
| Rs 7,501 – 10,000 | Rs 175 | Nil |
| Rs 10,001 – 25,000 | Rs 200 (Rs 300 in February) | Nil |
| Above Rs 25,000 | Rs 200 (Rs 300 in February) | Rs 200 (Rs 300 in February) |
- PTEC: Rs 2,500 per year for the entity (and applicable directors/professionals individually); annual payment by 30 June for those enrolled before 31 May.
- PTRC returns: monthly where the previous year's liability crossed the notified threshold (currently Rs 1 lakh); otherwise annual — as per the current notification.
- Exemptions: senior citizens above 65, persons with 40%+ disability, parents of a disabled child, badli textile workers — and the practical NIL slab for women earning up to Rs 25,000.
- Delay costs: interest (1.25%–2% per month depending on the delay) plus penalty exposure; registrations themselves are quick, so arrears are the avoidable part.
Multi-state and remote teams — the modern problem
PT follows the state where the employment is exercised, not where the head office sits. A Thane-registered company with a hybrid team therefore reads like this:
| Employee location | PT position for the Maharashtra company |
|---|---|
| Thane / anywhere in Maharashtra | Maharashtra PTRC — deduct per the slab above |
| Bengaluru (Karnataka) | Karnataka PT applies — obtain Karnataka PTRC and deduct per its slab |
| Delhi / Gurugram / Noida | No PT — Delhi, Haryana and UP levy none |
| Kolkata (West Bengal) | West Bengal PTRC and slabs apply |
The same logic applies to branch offices and to directors (individual PTEC in states where they carry on their profession, as applicable). Remote-first companies routinely discover missing state registrations only during due diligence — run the mapping once and wire it into payroll.
Common mistakes we keep fixing
- Entity PTEC skipped because “we have no employees yet” — the enrolment is for the entity itself.
- Women's Rs 25,000 NIL threshold missed in Maharashtra payroll — over-deduction that annoys staff and needs refunds.
- February's Rs 300 slab treated as a software glitch and “corrected” back to Rs 200.
- Hiring in Karnataka/WB without local PTRC — the head-office registration does not travel.
- Annual PTEC payment made in year one, forgotten every year after.
Where this fits in your setup journey: PT is one of the operational registrations in our first-year compliance checklist, and Section 8 companies have the same obligations — see the Section 8 first-year guide. Payroll-side impact of the labour codes is covered in the employer guide to the new codes.
Frequently asked questions
What exactly is professional tax and who charges it?
A tax levied by STATE governments on professions, trades, callings and employment under Article 276 of the Constitution, which also caps it at Rs 2,500 per person per year. The Union government has nothing to do with it — which is why the rules change at every state border.
Which states have no professional tax at all?
Delhi, Uttar Pradesh, Haryana, Punjab, Rajasthan and Uttarakhand levy no professional tax, and most union territories also do not. An employee working in these states has no PT deduction — even if the employer is a Maharashtra company.
What is the difference between PTEC and PTRC?
PTEC (Enrolment Certificate) is the entity’s/professional’s OWN tax — a company, LLP, firm, director or freelancer pays a fixed amount (Rs 2,500 a year in Maharashtra) for itself. PTRC (Registration Certificate) is the EMPLOYER-side registration to deduct slab-wise PT from employees’ salaries and deposit it. A company with staff typically needs both.
My company is in Maharashtra but my developer works from Delhi. Whose PT applies?
PT follows the state where the employment is exercised. The Delhi-based employee suffers no PT (Delhi levies none); a Bengaluru-based employee falls under Karnataka PT, needing a Karnataka PTRC; your Thane staff fall under Maharashtra. Multi-state teams mean multi-state PT registrations — this is the most-missed compliance in remote-first companies.
Is professional tax deductible from income tax?
Yes — PT actually paid is deductible from salary income under Section 16(iii) (your employer nets it off in Form 16 automatically) and as a business expense for the self-employed under the old regime rules as applicable.
Who is exempt from professional tax in Maharashtra?
Senior citizens above 65, persons with 40%+ disability, parents of a child with disability, and badli textile workers, among others. Also practical: women earning up to Rs 25,000 a month suffer NIL deduction under the salary slab — a threshold many payroll teams still miss.
PTEC and PTRC registrations, arrears regularisation and slab-correct payroll wiring, Maharashtra and beyond.
PTEC / PTRC ServicesPF, ESIC & PT ComplianceTalk to usGeneral information as of 20 July 2026, not professional advice. State PT Acts, slabs and thresholds change by notification — verify the current position for each state before acting. Consult a professional for your specific facts.