Professional Tax (PT)
A state-levied tax on salaried income and professions, deducted by the employer — but the slabs, thresholds, and even whether it exists at all vary by state.
What it is
Professional Tax (PT) is a tax levied by state governments — not the central government — on income earned through employment or a profession. Employers deduct PT from employee salaries each month and deposit it with the relevant state authority, alongside filing periodic returns.
Who it applies to
This is the one entry in this glossary where "it depends on your state" isn't a hedge — it's the actual rule. States such as Karnataka, Maharashtra, West Bengal, Gujarat, Madhya Pradesh, and Telangana levy Professional Tax with their own income slabs and rates, while a number of other states and union territories — including Delhi, Haryana, Uttar Pradesh, and Rajasthan, at the time of writing — do not levy it at all. Where PT applies, the amount owed depends on the employee's monthly or annual salary slab, and those slabs are set — and periodically revised — by each state government independently.
Why it matters for payroll
Because PT rules sit at the state level and change without any central announcement, this is one of the most common places multi-location payroll breaks down: an employee transferred between offices in two different states can see their PT deduction change even though their salary didn't. Any payroll process, manual or automated, needs a state-by-state PT table that gets checked against current state notifications rather than assumed permanent.
We deliberately don't publish a state-by-state PT rate table here — slabs change by state notification, and a stale number is worse than no number. Always confirm against your state's current professional tax rules.