Professional Tax by State in India: Which States Charge It, and How Much
Salary calculators across this site correctly note that professional tax is "commonly ₹200 a month." That figure is real, but it's also only true in some states and not others. This lays out which states actually levy it, roughly how much, and which states charge nothing at all.
State-set taxes like this one change independently and without much notice, so read the note below before treating any figure here as permanent.
Last verified date on this article
The rates below reflect what's commonly reported as of September 2026. Professional tax is set independently by each state government and can be revised by any of them without a coordinated announcement. This is one of the fastest-changing figures in Indian payroll. Confirm your specific state's current slab on its official commercial tax department website before relying on a figure here for actual payroll processing.
Recent state-level changes
Two changes worth knowing about specifically, both from 2025–2026:
- Karnataka raised its exemption threshold from ₹15,000 to ₹25,000 gross per month, effective 1 April 2025. Employees earning between ₹15,001 and ₹24,999 a month, previously liable, are now exempt. For those still above ₹25,000, the annual amount also rose slightly, to the same ₹2,500 cap other states use, reached the same way: ₹200 deducted for most months and a higher amount in one month to land exactly on the cap.
- Odisha repealed professional tax entirely, retrospective to 1 April 2026, see the FAQ below for the specific ordinance. Its row has been moved out of the "states that levy it" table accordingly.
Reported consistently across multiple legal and payroll-compliance publications; this environment can't reach each state's own gazette notification directly. Confirm against your state's official commercial tax department before relying on either change for payroll processing.
Why professional tax varies by state
Professional tax is levied under Article 276 of the Constitution, which specifically reserves this tax for state governments rather than the centre. That's why it doesn't appear in central income tax law at all, and why there's no single national rate to look up. The same Article also caps it at ₹2,500 per person per year, no matter which state levies it or how high the person's income is.
States that levy it: approximate rates
| State | Approximate top monthly rate | Notes |
|---|---|---|
| Maharashtra | Up to ₹200/month | One month (commonly February) is adjusted higher to reach the ₹2,500 annual cap exactly. Women are exempt up to ₹25,000/month gross, a higher threshold than the ₹7,500/month at which men become liable |
| Karnataka | ₹200/month above ₹25,000 gross | Nil below ₹25,000 gross (raised from ₹15,000 in an April 2025 revision); above that, ₹200/month with one month adjusted higher to reach ₹2,500/year, the same mechanism Maharashtra uses |
| West Bengal | Up to ₹200/month | Uses a multi-band slab structure rather than one flat cutoff |
| Tamil Nadu | Varies by local body | No single state-wide rate: levied and administered by local municipal bodies, typically half-yearly |
| Andhra Pradesh / Telangana | Up to ₹200/month | Nil below roughly ₹15,000 gross, then a slab up to ₹200 |
| Gujarat, Madhya Pradesh, Kerala, Assam, Bihar and several others | Levied, typically ≤₹200/month | Each sets its own slab independently: check the specific state rather than assuming it matches a neighbour |
States with no professional tax
Several states currently levy no professional tax at all, including Delhi, Uttar Pradesh, Haryana, Uttarakhand, Rajasthan, Himachal Pradesh, Jammu & Kashmir, and Goa. Odisha joined this list from 1 April 2026, after repealing its professional tax act, see "Recent state-level changes" above. Punjab is a notable near-miss: it doesn't levy "professional tax" under that name, but does collect a similarly structured state development tax at a comparable flat rate, worth knowing about even though it isn't technically the same tax.
How it's actually deducted
For salaried employees, professional tax is deducted monthly by the employer, the same way TDS is. You don't pay it separately or file anything yourself. Self-employed professionals and certain business owners typically register and pay it directly instead, often on a different (commonly annual or half-yearly) schedule set by the state. It's one of the deductions between gross and net salary. See how to calculate gross salary from net salary for how it fits alongside PF and income tax.
Worked example
Two employees both earn ₹40,000 gross a month. One works in Maharashtra and has ₹200 deducted most months (₹300 in the adjustment month), for ₹2,500 a year. The other works in Delhi and has nothing deducted for professional tax at all. Their PF and income tax deductions are otherwise calculated exactly the same way. The ₹2,500 difference over a year isn't a mistake on either payslip; it's simply where each of them is based.
Illustrative example. Confirm your own state's current slab rather than assuming either scenario applies to you.
Common mistakes
- Assuming a figure from one state applies nationally. "Professional tax is ₹200 a month" is true in some states, ₹0 in others, and a different slab structure entirely in a few. Always check the specific state.
- Not updating the deduction after an inter-state transfer. Moving to a different state's office should change your professional tax deduction (up, down, or to zero). An unchanged deduction after a transfer is worth double-checking with payroll.
- Treating Punjab's development tax as "no professional tax." It isn't called professional tax, but it functions similarly and still reduces take-home pay by a comparable amount.
- Assuming self-employed professionals are automatically exempt. Several states extend professional tax to self-employed individuals and businesses, not just salaried employees. Don't assume it's payroll-only without checking your state.
- Treating this list as permanent in either direction. Odisha went from levying professional tax to charging none at all from 1 April 2026. States can also introduce or raise it. Re-check rather than relying on last year's payroll setup unchanged.