Professional tax slabs by state for 2026-27

Who deducts professional tax, and the yearly cap

Professional tax (PT) is levied by states under Article 276 of the Constitution. For salaried employees, the employer deducts it from salary and pays it to the state, usually holding a registration certificate for each state in which it employs people. The state that applies is the state where the employee works.

• Yearly cap: Article 276(2) limits PT to ₹2,500 per person per year. The schedules below are set to stay within it.
• February instalment: Maharashtra and Karnataka charge ₹300 instead of ₹200 in February in the top band, bringing the year to ₹2,500.
• Basis: in states with monthly slabs, the band is chosen on the salary for the month. Half-yearly and annual states band on income for the half-year or the year.
• Exemptions: each state has its own, such as senior citizens (65 and over in Maharashtra, 60 and over in Karnataka), people with disabilities and members of the armed forces. Check the state's act for the full list.

States with monthly slabs

In these states the employee's salary for the month decides the band, and the amount is a fixed sum for that band — it is not reduced pro rata.

West Bengal: new slabs from 1 October 2026

West Bengal replaced its salary schedule from 1 October 2026. Use the old schedule for pay periods up to September 2026 and the new one from October 2026.

Half-yearly professional tax

In Tamil Nadu, Kerala and Puducherry, PT is levied by the local body — the municipal corporation, municipality, council or panchayat — on income for each half-year: April to September and October to March. The employer deducts it in the half-year and pays it to the local body.

States that tax annual income

Madhya Pradesh, Manipur, Bihar and Jharkhand band PT on the employee's income for the year. The employer works out the year's amount and deducts it in monthly instalments. Madhya Pradesh sets the split itself: ₹2,000 is ₹166 a month for eleven months and ₹174 in the twelfth; ₹2,500 is ₹208 for eleven months and ₹212 in the twelfth.

Punjab levies a State Development Tax of ₹200 a month on employees who are income-tax payees — those whose taxable income is above the basic exemption limit — deducted by the employer. An employee whose income tax the section 87A rebate brings to nil still pays it if their taxable income is above that limit.

States that do not levy professional tax

Not every state levies PT. Two recent examples: Odisha repealed its professional tax with effect from 1 April 2026, and Chhattisgarh has exempted everyone since 1 April 2011. For employees working in a state with no PT, nothing is deducted.

How Verdeshell applies professional tax

In Verdeshell HRMS, the state PT slabs are maintained by Verdeshell, so a state notification does not mean editing formulas. PT is worked out from the state of the employee's work location, using the rule in force for the pay period.

• Monthly states: the band is chosen on the salary earned for the month, after loss of pay, and the full band amount is deducted. February amounts are applied automatically, and Maharashtra's separate schedule for women is used where it applies.
• Half-yearly states: the work location records its local body, and PT is deducted in the collection months on the half-year's income.
• Annual states: the year's income is projected and the year's PT is spread over the months, balancing in March.
• The yearly cap is applied per state per financial year, counting PT already deducted, including in a full and final settlement.
• Exemptions such as disability or armed-forces service can be recorded on the employee, and seniors are exempted at the state's age.
• States Verdeshell does not maintain can use your company's own slabs, and the run warns you before payroll if a state has none.
• Each month the PT register shows PT deducted per employee, by state.

• Professional tax in the glossary
• Payroll software for India