Professional Tax Registration
Professional tax is a state levy capped at ₹2,500 a year per person — trivial in amount, and a persistent source of penalties because it is state-by-state, has two separate registrations, and is not levied everywhere.
Starts at ₹999 per state + government fees
What professional tax is
Professional tax is levied by state governments on income from a profession, trade, calling or employment, under the authority of Article 276 of the Constitution. That article caps the total at ₹2,500 per person per year, which is why the amounts are small.
There are two registrations, and they do different things. PTEC — the enrolment certificate — covers the entity or professional’s own liability. PTRC — the registration certificate — is what allows you to deduct professional tax from employees’ salaries and pay it over. An employer generally needs both.
Crucially, professional tax is not levied in every state. Maharashtra, Karnataka, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Gujarat, Madhya Pradesh, Kerala, Odisha and Assam are among those that do levy it. Delhi, Haryana, Uttar Pradesh, Rajasthan and Punjab, among others, do not.
What we handle
The business’s own enrolment, required even where you have no employees at all.
The registration that permits deduction from salaries, generally required within thirty days of employing your first person.
Liability follows where employees actually work. Remote teams spread across states create obligations in each of them.
Rates and slabs differ by state and by salary band. We set them up correctly in payroll rather than approximating.
Filing frequency varies — monthly or annually depending on the state and the amount of tax deducted.
Professional tax paid is deductible in computing business income, and for employees under section 16(iii) in the old regime.
Documents required
Entity
- PAN of the business
- Certificate of incorporation, partnership deed or LLP agreement
- Proof of the place of business in the state concerned
- Bank account details and cancelled cheque
People
- PAN, Aadhaar and photograph of the proprietor, partners or directors
- List of employees with salary bands, state-wise
- Date on which the first employee was engaged in each state
- Authorisation letter for the signatory
Not sure which package fits?
A specialist will map your situation to the right plan in one call.
How we set it up
- Map the statesDays 1–2
We establish which states you actually have liability in, based on where the business and its employees are located.
- PTEC applicationDays 2–7
Enrolment certificate applied for in each relevant state.
- PTRC applicationDays 2–10
Registration certificate for salary deduction, where you have employees in that state.
- Payroll configurationDays 7–12
State-wise slabs configured so deduction is correct from the first payroll run.
- Calendar setOngoing
Payment and return dates diarised for each state, since they differ.
Transparent pricing
Single State
₹999
PTEC or PTRC, one state
- Applicability check
- One registration
- Slab guidance
- Payment schedule
- Both PTEC and PTRC
- Return filing
Employer Pack
₹2,999
PTEC + PTRC, one state
- Everything in Single State
- Both PTEC and PTRC
- Payroll slab configuration
- Return calendar
- Multi-state
Multi-State
₹9,999
up to 4 states, managed
- Everything in Employer Pack
- Up to 4 states covered
- Monthly return filing
- Remote-team liability mapping
- Notice handling
All prices are professional fees exclusive of GST at 18%. Government fees and stamp duty are charged at actuals and shown before you pay.
Where employers get caught
Remote teams create multi-state liability
Professional tax follows where the employee actually works, not where the company is registered. A Bengaluru company with three employees working from Kolkata, Pune and Chennai has potential liability in all three states. This is the single biggest source of exposure since distributed working became normal, and it is almost universally overlooked.
Not every state levies it
Delhi, Haryana, Uttar Pradesh, Rajasthan and Punjab, among others, do not levy professional tax at all. Companies headquartered in these states often assume the obligation does not exist anywhere — then hire someone in Maharashtra or Karnataka and acquire it without noticing.
PTEC applies even with no employees
The enrolment certificate covers the entity’s own liability. A single-director company with no staff in a state that levies professional tax still needs PTEC. This is the registration most commonly missed by small companies.
Deducting without PTRC is worse than not deducting
Money deducted from employees’ salaries and not deposited is a serious matter, quite apart from the tax itself. If deduction has begun, the registration and the deposits need to be regularised promptly.
Small amounts, disproportionate penalties
The tax is capped at ₹2,500 per person a year, but interest and penalties for late registration, late payment and late returns are levied per state under each state’s own Act. Multiplied across states and years, the penalties routinely exceed the tax many times over.
Each state administers its own Act through its commercial tax or revenue department; the constitutional ceiling is set by Article 276.
Ongoing obligations
Deduct at the correct slab each month and deposit by the state’s due date. Filing frequency varies — monthly in some states, annually in others, and sometimes depending on the quantum of tax deducted.
Revisit the state map whenever you hire. A single new remote employee in a levying state creates a fresh registration obligation, usually within thirty days.
Where an employee works in more than one state during a year, or moves, the position needs to be handled deliberately rather than left to default in payroll.
Frequently asked questions
What is the difference between PTEC and PTRC?
PTEC is the enrolment certificate covering the entity or professional’s own professional tax liability. PTRC is the registration certificate that allows an employer to deduct professional tax from employees’ salaries. Most employers need both.
Which states levy professional tax?
Maharashtra, Karnataka, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Gujarat, Madhya Pradesh, Kerala, Odisha and Assam are among those that do. Delhi, Haryana, Uttar Pradesh, Rajasthan and Punjab, among others, do not levy it.
How much is professional tax?
It varies by state and salary slab, but the constitutional ceiling under Article 276 is ₹2,500 per person per year. The amounts are small; the penalties for non-compliance often are not.
Do I need registration in every state where I have employees?
Yes, in every state that levies professional tax and where employees actually work. Distributed teams create obligations in multiple states, which is the most commonly missed exposure.
Do I need PTEC if I have no employees?
Yes, if you operate in a state that levies professional tax. The enrolment certificate covers the entity’s own liability regardless of headcount.
When must I register?
Generally within thirty days of becoming liable — for PTRC, within thirty days of engaging your first employee in that state. Late registration attracts interest and penalties under the relevant state Act.
Official references
The statutory sources behind this page. We keep our guidance aligned to them — verify anything time-sensitive directly.
- Ministry of MSMEUdyam registration and MSME schemes
- DGFTImport Export Code and foreign trade policy
- FSSAIFood business licensing and standards
Content on this page is reviewed by a chartered accountant or advocate at LexVerge LLP. It is general guidance, not advice on your specific facts.