Professional Tax State-Wise Rates 2026: How Much Indian Salaried Employees Pay and Where to Claim It

TL;DR

• Professional tax (PT) is levied by 16 Indian states and union territories on salaried employees, professionals, and traders.
• The Constitutional cap is Rs. 2,500 per annum per person under Article 276.
• States like Maharashtra, Karnataka, West Bengal, Telangana, Andhra Pradesh, Kerala, Tamil Nadu, and Gujarat levy PT; Delhi, UP, Uttarakhand, Rajasthan, Haryana, and J&K do not.
• Employers deduct PT from salary monthly and deposit it with the state government; the deduction appears in your salary slip and Form 16.
• PT paid by you is deductible from salary under Section 16(iii) of the Income-tax Act, 1961, both in old and new tax regimes for AY 2026-27.
• The deduction is automatic in Form 16 Part B — you do not need to claim it separately, but you must check it is captured correctly.

What this means in plain terms

Professional tax is the small Rs. 200 or Rs. 208 line item you see deducted from your salary every month. It is not a central tax; it is collected by the state where you work. The total cannot exceed Rs. 2,500 in a financial year per the Constitution, so even on a Rs. 50 lakh CTC, the levy stays modest.

For AY 2026-27, the rules around PT did not change. The states' own slabs and amounts vary slightly. What matters for your ITR is that the amount your employer deducted shows up correctly in Form 16 Part B, where it reduces your taxable salary under Section 16(iii). The new tax regime allows this deduction, so it is one of the few that survives the regime switch.

State-wise structure for FY 2025-26

Maharashtra

Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975. Salary up to Rs. 7,500 per month: no PT. Rs. 7,501 to Rs. 10,000: Rs. 175 per month. Above Rs. 10,000: Rs. 200 per month (Rs. 300 in February to make annual Rs. 2,500). Women employees up to Rs. 25,000 per month: nil.

Karnataka

Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976. Salary up to Rs. 24,999 per month: no PT. Rs. 25,000 and above: Rs. 200 per month, capped at Rs. 2,400 per year. The state revised the threshold up from Rs. 15,000 in April 2023.

West Bengal

West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979. Salary up to Rs. 10,000: nil. Rs. 10,001 to Rs. 15,000: Rs. 110 per month. Rs. 15,001 to Rs. 25,000: Rs. 130. Rs. 25,001 to Rs. 40,000: Rs. 150. Above Rs. 40,000: Rs. 200.

Tamil Nadu

Tamil Nadu Municipal Laws (Profession Tax) Act. Tamil Nadu has a half-yearly PT structure based on slab. The annual amount stays within Rs. 2,500. The rates differ slightly by municipal corporation.

Andhra Pradesh and Telangana

Both states follow similar slabs: up to Rs. 15,000 nil, Rs. 15,001 to Rs. 20,000 at Rs. 150 per month, above Rs. 20,000 at Rs. 200 per month.

Kerala

Kerala Municipality Act-based PT, levied half-yearly. Annual amount aligned with the Rs. 2,500 cap.

Gujarat

Salary up to Rs. 12,000 per month: nil. Above Rs. 12,000: Rs. 200 per month (Rs. 2,400 per year), with adjustment in the last month to comply with the Rs. 2,500 cap.

States without PT

Delhi, Haryana, Uttar Pradesh, Uttarakhand, Rajasthan, Punjab (since recent withdrawal), Himachal Pradesh, Jammu and Kashmir, Ladakh, most North-East states (except Assam, Manipur, Tripura, Meghalaya, Mizoram, Nagaland which do levy), Goa, and Chandigarh do not levy PT on salaried employees.

How professional tax appears in Form 16

Part B salary computation

Form 16 Part B shows gross salary, then under "less: deductions under Section 16," it lists:

• 16(ia) Standard deduction (Rs. 75,000 under new regime, Rs. 50,000 under old)
• 16(ii) Entertainment allowance (government employees only)
• 16(iii) Tax on employment (this is your professional tax)

The PT figure here equals the total deducted from your salary slips for the year, typically Rs. 2,400 or Rs. 2,500.

Confirm with salary slips

Open all 12 monthly salary slips for FY 2025-26 and add up the "professional tax" line. The total should match Form 16's Section 16(iii) figure. If your state has a higher February deduction, factor it in.

Mismatches and corrections

If Form 16 shows zero PT and your salary slips show monthly deductions, the employer made an error. Ask for a corrected Form 16 before filing. If they refuse, claim the deduction directly in ITR under Schedule Salary Section 16(iii) with the cumulative PT amount.

Professional tax in your ITR

Claim under Section 16(iii)

In ITR-1 or ITR-2, the salary schedule has a separate field for "Tax on employment." Enter the full PT amount paid. The system reduces your taxable salary accordingly.

Available in both regimes

The deduction under Section 16(iii) survives in the new tax regime under Section 115BAC. This is unusual because most Chapter VI-A deductions are blocked. Section 16(iii) is preserved.

Limit is the actual payment

You cannot claim more than what was actually deducted from your salary or paid by you directly. The annual constitutional cap is Rs. 2,500. Some states stay below this, so claim what is on Form 16.

A real example

Suresh, 36, Rs. 28L CTC, Pune (Maharashtra). His employer deducted Rs. 200 per month from April to January (Rs. 2,000) and Rs. 300 in February and March (Rs. 600), totalling Rs. 2,500 for FY 2025-26. (Note: Maharashtra's typical structure deducts Rs. 200 for 11 months and Rs. 300 in February.)

1. Gross salary as per Form 16: Rs. 28,00,000.
2. Less Section 16(ia) standard deduction: Rs. 75,000.
3. Less Section 16(iii) professional tax: Rs. 2,500.
4. Net taxable salary: Rs. 27,22,500.
5. Tax under new regime AY 2026-27: roughly Rs. 4,68,750 plus 4% cess = Rs. 4,87,500.
6. Without the PT deduction, taxable salary would be Rs. 27,25,000 and tax would be Rs. 250 higher. Small but legitimate saving.

Suresh checked his Form 16 Part B and confirmed Rs. 2,500 was listed under Section 16(iii) before filing.

What to do this week

1. Identify the state where your employer is registered for PT (this is the state of your work location, not your home state).
2. Open your 12 monthly salary slips for FY 2025-26 and sum the professional tax deductions.
3. Compare the total against Form 16 Part B Section 16(iii). They should match.
4. Run the 6-step assessment at https://myfinancial.in to see your old-vs-new regime delta, unused deductions, and insurance gap in under 10 minutes.
5. If Form 16 misses the deduction, claim it in your ITR under Schedule Salary Section 16(iii) when filing before 31 July 2026.

FAQ

Is professional tax deductible under the new tax regime?

Yes. Section 16(iii) is preserved under Section 115BAC. This is one of the few deductions available in both regimes.

Do I pay PT in two states if I worked in different cities?

No. PT is levied based on the state where your employer is registered. If you worked in Bengaluru for six months and Mumbai for six months at different employers, both employers may have deducted PT under their respective state laws. Total is still capped at Rs. 2,500 per state, but you may end up paying close to the cap in two states.

What if my employer did not deduct PT but the state mandates it?

The liability rests primarily on the employer. If the state catches the lapse, the employer pays the dues with penalty. You are not personally liable. However, you do not get a Section 16(iii) deduction if no PT was deducted.

Is PT deductible if I am a freelancer?

Self-employed professionals (lawyers, doctors, CAs, architects) in states with PT must register and pay it themselves. They claim it as a business expense, not under Section 16(iii). Some states have separate slabs for professionals.

Why is PT in Karnataka only Rs. 2,400 and not Rs. 2,500?

Karnataka's monthly rate of Rs. 200 multiplied by 12 months gives Rs. 2,400. The Constitutional cap is Rs. 2,500, but states can choose to stay below. Karnataka does.

Does PT change when I move from Bengaluru to Hyderabad mid-year?

Yes. If you move from Karnataka (Rs. 200 per month) to Telangana (Rs. 200 per month from Rs. 20,001 onwards), both employers will deduct PT for the months you worked. Total may approach Rs. 2,500 across both.

Can the company refund PT if I left mid-year?

PT is non-refundable. It is paid to the state for the months worked. No reversal happens upon resignation.

Sources

• incometax.gov.in (Income Tax Department, Government of India)
• Section 16(iii), Section 115BAC of the Income-tax Act, 1961 — incometax.gov.in
• Article 276 of the Constitution of India (cap on professional tax)
• State PT Acts — Maharashtra, Karnataka, West Bengal, Tamil Nadu, Gujarat, Telangana, Kerala — respective state government websites
• finmin.nic.in (Ministry of Finance, Budget 2025 documents)

This is general information, not personalised advice. For your situation, consult a Certified Financial Planner.