In Professional Tax

---
name: in-professional-tax
description: "Use this skill whenever asked about Indian professional tax (profession tax). Trigger on phrases like \"professional tax India\", \"profession tax\", \"state professional tax\", \"Maharashtra professional tax\", \"Karnataka professional tax\", \"West Bengal professional tax\", \"PT registration\", \"PT return\", \"Section 16(iii)\", \"profession tax deduction\", or any question about professional tax obligations, rates, registration, or payment in India. This skill covers state-level professional tax rates and slabs for major states, deductibility under Income Tax Act, registration and filing requirements, and employer obligations. ALWAYS read this skill before touching any Indian professional tax work."
license: "AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (content)"
metadata:
  source: openaccountants
  openaccountants_url: "https://www.openaccountants.com/skills/in-professional-tax"
  jurisdiction: "IN"
  tax_year: "2026"
  last_updated: "2026-11-06"
---

# India Professional Tax (Profession Tax)

This Guide covers profession tax in India: the constitutional ceiling, the Telangana schedule and procedure, and how profession tax is treated for income tax. Figures are for tax year 2026. For income tax this means the tax year from 1 April 2026 to 31 March 2027 under the Income-tax Act 2025, which replaced the Income-tax Act 1961 from 1 April 2026. For Telangana profession tax it means the profession tax year from 1 April 2026 to 31 March 2027, because the Telangana Act defines a year as the twelve months ending on 31 March. Only Telangana's profession tax pages can be read from an official source, so this Guide gives schedules and dates for Telangana only. For every other State it tells you where to check and gives no figures.

## Section 1: Quick Reference

| Field | Value |
| --- | --- |
| Country | India |
| Tax | Profession tax (professional tax, PT): a State tax on professions, trades, callings and employments |
| Currency | INR only |
| Telangana law | Telangana Tax on Professions, Trades, Callings and Employments Act, 1987, First Schedule "as amended upto date" |
| Telangana authority | Commercial Taxes Department, Government of Telangana |
| Income tax treatment | Income-tax Act 2025, section 19(1), Table serial 1 (salary deduction), not available under the default regime in section 202(1) |

### The constitutional ceiling

| Item | Value | Note |
| --- | --- | --- |
| Source | all figures below | https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct.aspx |
| Maximum profession tax the Constitution allows, per year | INR 2,500 | "The Constitution empowers the levy of Profession Tax subject to a maximum of Rs.2500/- p.a." |

The ceiling in the table above is a yearly amount, not a monthly one. The page is a Telangana department summary; it says only that the Constitution sets this maximum and does not quote the article.

### Core Principle

Profession tax is charged by a State under its own Act and schedule. In Telangana, section 4 of the 1987 Act levies the tax "for the benefit of the State" on every person engaged in a profession, trade, calling or employment in the State who falls in a class in the First Schedule, at the rate in that entry ([section 4](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/04Levy.html)). Telangana's schedule and procedure bind only Telangana. Another State's rates, forms, dates and exemptions come from that State's own Act, so the State where the person is employed or works decides which schedule applies.

### Conservative Defaults

| Ambiguity | Default |
| --- | --- |
| Unknown State of employment or practice | Do not compute. Confirm the State first |
| State other than Telangana | Do not compute. Send the client to that State's own schedule (Section 2.9) |
| Unknown monthly salary or wages | Do not compute. Get the monthly figure as defined in the State's Act |
| Unknown whether the employer deducts | In Telangana the employer must deduct and is liable even if it does not (section 5). Check payslips |
| Unknown income tax regime | Assume the default regime under section 202(1) of the 2025 Act, where the salary deduction for profession tax (section 19(1), Table serial 1) is not allowed, until the client confirms an opt-out |

## Section 2: State-Wise Rates and Slabs

### 2.5 Telangana (the only State whose schedule this Guide can show)

The table below is the Telangana First Schedule as printed on the Telangana Commercial Taxes Department site. Salary bands are by MONTHLY salary or wages. "PM" means per month and "PA" means per year.

| Item | Value | Note |
| --- | --- | --- |
| Source | all figures below | https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTSchedule.aspx |
| Entry 1, salary and wage earners: monthly salary or wages up to this amount pay nil | INR 15,000 | "(i) Up to 15,000 Nil (ii) From 15,001 to 20,000 150 PM" |
| Entry 1: second band starts at | INR 15,001 | "From 15,001 to 20,000 150 PM" |
| Entry 1: second band ends at, and the top band starts above | INR 20,000 | "(iii) Above 20,000 200 PM" |
| Entry 1: tax per month, second band | INR 150 | "From 15,001 to 20,000 150 PM" |
| Entry 1: tax per month, monthly salary or wages above INR 20,000 | INR 200 | "(iii) Above 20,000 200 PM" |
| Entry 2, listed professionals (legal practitioners, chartered accountants, tax consultants, engineers, architects, doctors, journalists, agents and others in the entry) with more than 5 years' standing: tax per year. Up to 5 years' standing: nil | INR 2,500 | "(i) Up to 5 years Nil (ii) More than 5 years 2500 PA" |
| Entry 4, contractors, and entry 8, registered dealers and shopkeeper employers: annual turnover from 10 lakh to 50 lakh rupees, tax per year. Below 10 lakh rupees: nil | INR 1,250 | "(ii) From Rs.10 lakhs to Rs.50 lakhs 1250 PA (iii) Above Rs. 50 lakhs 2500 PA" |
| Entries 4 and 8: annual turnover above 50 lakh rupees, tax per year | INR 2,500 | "(c) Above Rs 50 lakhs 2500 PA" |
| Entry 5, directors drawing remuneration from a company (other than directors nominated by the Government), tax per year | INR 2,500 | "Companies Registered under the Companies Act, 1956. 2500 PA" |
| Entry 20, companies not being dealers under the VAT Act and engaged in a profession, trade or calling with turnover of 10 lakh rupees and above, tax per year | INR 2,500 | "with turnover of Rs. 10.00 lakhs and above. 2500 PA" |
| Entry 21, each partner of a firm drawing remuneration from the firm, tax per year | INR 1,250 | "drawing remuneration from the firm engaged in any profession, trade or calling. 1250 PA" |
| Entry 39, exempt: includes physically handicapped persons with this degree of disability or more | 40% | "Physically Handicapped persons with 40% or more disability of any kind" |
| Entry 40, any other person in a profession, trade, calling or employment with annual income MORE than this amount, tax per year (unless exempt under section 31 or entry 39) | INR 180,000 | "annual income of more than Rs 1,80,000/- but excluding those who are exempted under Section 31" |
| Entry 40: tax per year | INR 2,500 | "exempted under Section 31 of the Act and Entry No. 39 above. 2500 PA" |

Rules that go with the table above:

- Salary means monthly "salary or wages" as defined in section 2: pay, wages, dearness allowance and all other remuneration received on a regular basis, in cash or kind, including perquisites and profits in lieu of salary, but NOT bonus or gratuity ([section 2](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/02Definitions.html)).
- A person who earns wages on a casual basis is not a "person" under section 2 and is not charged. Every branch of a firm, company, corporation or other corporate body, society, club or association is deemed to be a separate person (section 2, Explanation).
- The salary entry prints a monthly amount only. It prints no different amount for February or any other month. Do not add a February top-up for Telangana.
- The band edges in the table above are "up to" (nil band includes the edge), "from ... to" (both ends included) and "above" (strictly more than).
- The schedule has 40 entries. The table above shows the entries most clients fall in. Entries 3, 6, 7, 9 to 19 and 22 to 38 cover other trades (stock exchange members, film industry, factories, hospitals, hotels, banks, transport, call centres, landlords of commercial premises and others), mostly at the entry 2 or entry 4 amounts in the table above. Read the client's entry on the schedule page itself.
- Entry 39 also exempts agriculturists, persons performing religious duties, listed skilled persons (goldsmith, blacksmith, potter, basket maker, washerman, barber, cobbler, tailor, carpenter, mason, plumber, book binder, toddy tapper, electrician) and dry cleaners. Section 31 lets the Government exempt or reduce the tax for a class of assessees by notification ([section 31](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/31Power.html)). Notifications are listed on the department's PT "GO's & Notifications" page. Check that page for any notification covering the client.
- The schedule still uses the old Andhra Pradesh names (APVAT Act 2005, A.P. Shops and Establishment Act, Companies Act 1956). That is how the page prints it.

### 2.1 to 2.4 and 2.6 to 2.8: Maharashtra, Karnataka, West Bengal, Andhra Pradesh, Tamil Nadu, Gujarat, Madhya Pradesh

No allowed official page prints these States' profession tax schedules, so this Guide gives no slabs, amounts, due dates or forms for them. The live version of this Guide carried slabs for all seven States; none could be proven and some were internally contradictory. For each of these States:

1. Find that State's own profession tax Act and the schedule "as amended" on the website of the department the Act names as the assessing authority.
2. Read the entry for the client's class (salary, profession, trade) and whether bands are monthly, half-yearly or yearly.
3. Read the State's registration, enrolment, payment and return dates from that Act and its rules.
4. Check whether the State has notified any exemption for the client's class.

Andhra Pradesh and Telangana have separate schedules. Do not apply the Telangana table to Andhra Pradesh.

### 2.9 Every other State and Union Territory

Whether a State or Union Territory charges profession tax at all is a matter of its own law. This Guide does not list which States levy it and which do not, because no allowed page proves either list. Ask the State's tax department and record its answer.

## Section 3: Deductibility Under the Income-tax Act 2025

### The salary deduction

The section number changed with the new Act. For tax year 2026-27 the deduction is in section 19(1) of the Income-tax Act 2025, Table serial 1. It covers a "tax on employment as per article 276(2) of the Constitution, leviable by or under any law", described as a "Sum paid by the assessee", and the amount of deduction is the "Entire amount" ([Income-tax Act 2025](https://egazette.gov.in/WriteReadData/2025/265620.pdf)). The Finance Act 2026 does not amend that serial.

### The default regime removes it

Section 202(1) of the 2025 Act sets the default rates for individuals, HUFs, associations of persons (other than co-operative societies), bodies of individuals and artificial juridical persons, unless the person exercises the option in section 202(4). Under section 202(2)(a)(iv), total income on those rates is computed "without any exemption or deduction under" section 19(1) (Table: Sl. No. 1). So:

- On the default regime, profession tax paid is NOT deducted from salary. The standard deduction does not "cover" it; it is simply not allowed.
- Only a person who has opted out of section 202(1) under section 202(4) deducts profession tax paid from salary under section 19(1), Table serial 1.

The standard deduction is a separate serial (Table serial 2) with its own amounts for each regime: see the Guide `india-income-tax`.

### Business or profession income

A person with business or profession income who pays profession tax as an enrolled person is not claiming a salary deduction. Section 37 of the 2025 Act allows a "tax, duty, cess, surcharge or fee, by whatever named called, levied under any law in force" that is otherwise allowable only in the tax year in which it is actually paid. Whether the client's own profession tax is otherwise allowable under the general rule in section 34 (expenditure "laid out or expended wholly and exclusively for the purposes of the business or profession") is a question for the accountant. Never claim the same payment both as a salary deduction and as a business expense.

## Section 4: Registration and Compliance (Telangana)

Everything in this section is Telangana law. For any other State, read that State's Act.

### 4.1 Employer Obligations

| Obligation | Telangana rule |
| --- | --- |
| Deduct | The employer deducts the tax from the salary or wage before paying it, and is liable to pay it "irrespective of whether such deduction has been made or not" ([section 5](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/05Employer.html)) |
| Register | Every employer liable under section 5 (other than a State or Central Government officer) obtains a certificate of registration, Form I ([section 6](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/06Registration.html)) |
| Pay | By treasury challan in quadruplicate; the duplicate goes to the assessing authority with the return (rule 13 of the [Telangana PT Rules](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTRules.aspx)) |
| Return | Form V, for the periods and by the dates prescribed, showing salaries and wages paid and tax deducted, with the challan proving full payment. A return without proof of payment is not "duly submitted" ([section 7](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/07Returns.html); rule 12) |
| Employee with several employers, or in a higher entry | If the employee works for more than one employer, or also falls in another entry with a higher rate, and gives each employer a certificate (Form III or Form IV) that he will enrol and pay himself, the employers do not deduct and are not liable for him (section 5, second proviso; rule 10) |

The online Rules do not print the return period or the payment due date for a private employer. Rule 15 sets a monthly deduction duty and a 30 April statement only for Government drawing and disbursing officers. Confirm a private employer's period and due date with the Commercial Taxes Department.

### 4.2 Self-Employed / Professional Obligations

| Obligation | Telangana rule |
| --- | --- |
| Enrol | Every assessee other than a salary or wage earner whose employer pays for him obtains a certificate of enrolment, Form II (section 6) |
| Amount | The enrolment certificate states the tax payable under the First Schedule and the date to pay it, and serves as the notice of demand (section 6) |
| Pay | Before 30 June, if enrolled before the year starts or on or before 31 May of the year; within one month of enrolment if enrolled after 31 May ([section 10](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/10Payment.html)) |
| How | Treasury challan in quadruplicate; the duplicate goes to the assessing authority (rule 14) |

Insurance agents in entry 2 have tax deducted by the insurer from commission, remitted on the next working day (section 5-B). Licensed horse owners, trainers, book-makers and jockeys pay through the turf club (section 5-A).

### 4.3 Due dates, interest and penalties (Telangana)

| Default | Consequence |
| --- | --- |
| Late application for registration or enrolment (wilful) | Penalty of not less than rupees ten and not more than rupees twenty for each day of delay for an employer; not more than rupees five a day for others (section 6) |
| Deliberately false information in the application | Penalty from rupees one hundred to rupees one thousand (section 6) |
| Return late without reasonable cause | Penalty from rupees five to rupees one hundred for each day of delay (section 7) |
| Employer fails to deduct, or deducts and fails to pay | Deemed assessee in default, plus interest "at the rate of two rupees for every one hundred rupees or part thereof for every month or part thereof" from the due date ([section 11](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/11Consequences.html); rule 24) |
| Enrolled person fails to pay | Interest at the same rate (section 11(2)) |
| Tax not paid by the date in a notice of demand, without reasonable cause | Penalty of not less than twenty five percent and not more than fifty percent of the tax due, on top of interest ([section 12](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/12Penalty.html)) |
| Wilful failure to enrol | Best judgment assessment and a demand in Form XIV payable within fifteen days (rule 23) |

The live version of this Guide listed employer deposit and return dates for Maharashtra, Karnataka, West Bengal, Andhra Pradesh and Gujarat. None could be proven, so they are removed. Use each State's own Act and rules.

## Section 5: Edge Cases

### 5.1 Multiple Employments

In Telangana, a person employed by more than one employer can give each employer a certificate (Form III or IV), enrol under section 6(2) and pay the tax himself; the employers then stop deducting (section 5, second proviso). If too much was paid anyway, section 21 requires the assessing authority to refund the excess, or set it off against another period's dues at the assessee's option ([section 21](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/21Refund.html)). The assessing authority first applies the excess to any amount due under a section 8 notice (section 21, proviso).

### 5.2 Multi-State Employment

Telangana's Act charges people engaged in a profession, trade, calling or employment in Telangana (section 4); another State's Act sets its own reach. A person who moves State mid-year must check the second State's Act for its own registration and payment rules. This Guide cannot say how a second State treats profession tax already paid to the first. For income tax, section 19(1), Table serial 1 refers to a tax on employment "leviable by or under any law".

### 5.3 Directors

In Telangana, a director drawing remuneration from a company, other than a Government nominee, falls in entry 5 at the yearly amount in the Section 2.5 table. A director who is also a salaried employee may give the employer the section 5 certificate (Form III or IV) only where the rate under entry 5 is more than the rate under entry 1 for that salary (section 5, second proviso).

### 5.4 Freelancers / Gig Workers

In Telangana, a self-employed person enrols under section 6(2) and pays under section 10. A professional named in entry 2 pays nothing for the first 5 years of standing in the profession. A person in no specific entry falls in entry 40 only if annual income is more than the entry 40 limit in the Section 2.5 table.

### 5.5 Exemptions

In Telangana: the entry 39 classes, professionals in entry 2 with up to 5 years' standing, salary earners in the nil band, and any class exempted by notification under section 31. The live Guide's list of exemptions in other States (parents of disabled children, armed forces, people over 65 in Maharashtra, textile badli workers) could not be proven and is removed. Check the other State's Act.

## Section 6: Filing Requirements Summary

| Item | Telangana |
| --- | --- |
| Employer registration | Certificate of registration, Form I (section 6(1)) |
| Self-employed enrolment | Certificate of enrolment, Form II (section 6(2)) |
| Employer return | Form V with treasury challan (section 7, rule 12) |
| Employee opting to pay himself | Certificate to employer, Form III or IV (section 5, rule 10) |
| Refund of excess | Section 21, rule 29, Form XV |
| Proof for an income tax deduction | Evidence that the sum was paid as a tax on employment (the section 19(1) wording is "Sum paid") |
| Books | The assessing authority may direct an employer how to keep books; wilful failure costs not more than rupees five a day ([section 17](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/17Accounts.html)), and every employer keeps a register of salary paid and tax deducted for each employee (rule 20) |

## The method, step by step

1. Fix the State where the person is employed or carries on the profession, trade or calling. If it is not Telangana, go to Section 2.1 to 2.9: read that State's own Act and schedule and do not use any figure in this Guide except the constitutional ceiling ([Telangana Act page](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct.aspx)).
2. Telangana: find the person's entry in the First Schedule. For a salary or wage earner, take the monthly "salary or wages" as defined in section 2 (excluding bonus and gratuity) and read the band ([Telangana schedule](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTSchedule.aspx)).
3. Telangana: check entry 39, entry 2's five-year rule and any section 31 notification for an exemption ([section 31](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/31Power.html)).
4. Telangana employer: register (Form I), deduct every month from salary, pay by challan and file Form V; confirm the return period and due date with the department ([section 5](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/05Employer.html), [section 7](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/07Returns.html)).
5. Telangana self-employed: enrol (Form II) and pay before 30 June, or within one month of enrolment if enrolled after 31 May ([section 10](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/10Payment.html)).
6. For a late payment, apply interest at two rupees per hundred rupees per month or part month and consider the section 12 penalty ([section 11](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/11Consequences.html), [section 12](https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/12Penalty.html)).
7. Income tax: if the person is on the default regime under section 202(1), give no salary deduction for profession tax under section 19(1), Table serial 1. If the person opted out under section 202(4), deduct the sum paid from salary under section 19(1), Table serial 1 ([Income-tax Act 2025](https://egazette.gov.in/WriteReadData/2025/265620.pdf)). For business income, apply sections 34 and 37 and never claim the same payment twice.
8. Label every computation as an estimate and keep the payslips or challans as evidence.

## Ask the client first

- In which State do you work or carry on your profession or business, and did that change during the year?
- Are you salaried, a professional, a director, a partner, a contractor or a trader, and how many years have you practised?
- What is your regular monthly pay, leaving out bonus and gratuity?
- Do you work for more than one employer, or do you also pay profession tax yourself under an enrolment certificate?
- For income tax, have you opted out of the default regime under section 202 for this tax year?
- Do you have payslips or challans showing the profession tax actually paid?

## When to refuse or refer

- Refuse to compute profession tax for any State other than Telangana from this Guide. Give the steps in Section 2.1 to 2.9 instead.
- Refer when a Telangana client may be covered by a section 31 notification, an exemption entry not clearly met, or two entries at once.
- Refer disputes, assessments, best judgment notices, appeals and penalty proceedings to an accountant.
- Refer the question whether a self-employed person's own profession tax is a business expense under section 34.
- Refer any case where profession tax was paid to two States in one year.

## Section 7: Prohibitions

- NEVER compute profession tax without knowing the State of employment or practice.
- NEVER apply Telangana's schedule, or any remembered slab, to another State.
- NEVER state any State's slabs, due dates or exemptions that are not on an official page you have read.
- NEVER treat the constitutional ceiling as a monthly amount.
- NEVER add a February top-up to Telangana salary deductions.
- NEVER give the section 19(1), Table serial 1 salary deduction for profession tax to a person on the default regime under section 202(1) of the 2025 Act.
- NEVER claim the same profession tax both under section 19(1), Table serial 1 and as a business expense.
- NEVER assert that a State does or does not levy profession tax without its own law in hand.
- NEVER present a computation as final. Label it as an estimate.

## Sources

- Telangana Commercial Taxes Department, PT Act page (constitutional ceiling, list of sections): https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct.aspx
- Telangana Tax on Professions, Trades, Callings and Employments Act, 1987, First Schedule as amended: https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTSchedule.aspx
- Telangana PT Act sections 2, 4, 5, 6, 7, 10, 11, 12, 17, 21 and 31: https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTAct/02Definitions.html and the sibling pages linked above
- Telangana PT Rules (rules 10, 12, 13, 14, 15, 23, 24): https://www.tgct.gov.in/tgportal/AllActs/APPT/APPTRules.aspx
- Income-tax Act 2025 (30 of 2025), sections 19, 34, 37 and 202: https://egazette.gov.in/WriteReadData/2025/265620.pdf

## Disclaimer

This Guide and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this Guide. All outputs must be reviewed and signed off by a qualified professional (such as a CA, CMA, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.

The most up-to-date version of this Guide is maintained on the OpenAccountants site. Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.

## Today's figures and who stands behind this skill

This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-11-06. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call `get_skill` with slug `in-professional-tax` on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/in-professional-tax. If neither is available, confirm every figure against the official source pages cited above before relying on it.