Professional tax is a tax levied by many states on income earned from employment, trade or profession. Employers deduct it from salaries, and businesses and professionals also pay it on their own account.
This guide explains professional tax, the PTEC/PTRC distinction, and employer duties.
What is Professional Tax?
Professional tax is capped at ₹2,500 per person per year nationally, with each state setting its own slabs. It is administered by state commercial-tax departments.
Employers need a PTRC to deduct and deposit PT from employees; businesses/professionals need a PTEC for their own liability.
| National cap | ₹2,500 per person per year |
|---|---|
| PTEC | Own professional tax liability |
| PTRC | Employer registration to deduct PT |
| Levied by | State governments |
Frequently asked questions
Is professional tax the same across India?
No. It is a state subject — some states levy it and others do not, and the slabs vary. The maximum is ₹2,500 per year.
What is the difference between PTEC and PTRC?
PTEC covers your own PT liability; PTRC is the employer registration to deduct and deposit PT from employees' salaries.