Professional Tax

Professional Tax (PT) is a state-level tax levied on individuals earning income from employment, trade, or profession. Unlike EPF and ESIC, which are central government schemes, Professional Tax is administered by individual state governments and varies significantly from state to state. Udyamo HRMS supports PT configuration per office location, allowing organizations with offices across multiple states to apply the correct slab rates automatically.

This chapter covers Professional Tax rules, state-wise slab configurations, how to set up PT in Udyamo HRMS, and how to generate the reports needed for filing.

What You Will Learn

• What Professional Tax is and which states levy it
• The constitutional cap on Professional Tax
• How to configure PT per office in Udyamo HRMS
• How state-wise PT slabs work
• How PT is calculated during payroll
• How to generate PT reports
• Exemptions from Professional Tax
• Filing requirements and deadlines

Prerequisites

Required: Before configuring Professional Tax, ensure the following:

• At least one office is created with the correct state (see Offices & Locations)
• Salary components and structures are configured (see Salary Components)
• The office's PT registration number is available from the respective state authority

Understanding Professional Tax

What is Professional Tax?

Professional Tax is a direct tax deducted from an employee's salary by the employer and remitted to the state government. It is authorized under Article 276 of the Constitution of India, which also imposes a maximum ceiling of Rs 2,500 per year on the total Professional Tax that can be levied on any individual.

Which States Levy Professional Tax?

Not all Indian states levy Professional Tax. The following states and union territories currently impose PT:

Tip: States such as Delhi, Haryana, Uttar Pradesh, Rajasthan, Punjab, and Uttarakhand do not currently levy Professional Tax. Employees in offices located in these states will not have any PT deduction.

Common State PT Slab Tables

Professional Tax slabs vary by state. Below are the slabs for some of the most commonly used states. These are provided as reference; always verify against the latest state government notification.

Maharashtra

Tip: In Maharashtra, the PT for the month of February is Rs 300 (instead of Rs 200) for the highest slab. This ensures the annual total reaches Rs 2,500 (Rs 200 x 11 months + Rs 300 = Rs 2,500).

Karnataka

West Bengal

Andhra Pradesh / Telangana

Gujarat

Tamil Nadu

Warning: PT slabs are subject to change by state governments. Always verify the current slabs when configuring PT in Udyamo HRMS. The tables above are representative and may not reflect the latest amendments.

Setting Up Professional Tax in Udyamo HRMS

PT configuration in Udyamo HRMS is tied to the Office entity, because PT rates depend on the state where the office is located.

Step 1: Enter the PT Registration Number

1. From the sidebar, click Settings.
2. Navigate to Organization > Offices.
3. Click on the office you want to configure.
4. In the PT Number field, enter the Professional Tax registration number assigned by the state authority.
5. Click Save.

Tip: Each office in a different state may have a separate PT registration number. Configure each office individually.

Step 2: Configure PT Slabs

1. From Settings, navigate to Statutory Components.
2. Click on Professional Tax.
3. Ensure the PT component is Enabled.
4. Select the State for the PT slab you want to configure.
5. Enter the slab ranges and corresponding monthly PT amounts.
6. Click Save.
7. Repeat for each state where your organization has offices.

PT Slab Configuration Fields

Tip: For states like Maharashtra where the February PT amount differs, Udyamo HRMS automatically adjusts the last month's deduction to ensure the annual total matches the prescribed limit.

Step 3: Verify Configuration

After saving, verify by:

1. Navigating to Statutory Components and confirming PT is enabled.
2. Clicking on PT to see the configured slabs per state.
3. Cross-checking the slabs against the latest state government notification.

PT Calculation in Payroll

When payroll is processed, Udyamo HRMS calculates Professional Tax for each employee based on:

1. The office the employee is assigned to.
2. The state of that office.
3. The employee's gross monthly salary.
4. The PT slab applicable for that state and salary range.

Calculation Logic

1. Identify the employee's primary office.
2. Determine the state of the office.
3. Look up the PT slab table for that state.
4. Match the employee's gross salary to the correct slab.
5. Deduct the corresponding PT amount from the employee's salary.

Example — Maharashtra

Example — West Bengal

Viewing PT on Payslips

After payroll is processed, the PT deduction appears in the Deductions section of the employee's payslip:

1. Navigate to Payroll > Payslips.
2. Select the month and click on an employee's payslip.
3. Look for Professional Tax under Deductions.

Exemptions from Professional Tax

Certain categories of individuals are exempt from Professional Tax in various states. Common exemptions include:

Tip: To exempt a specific employee from PT in Udyamo HRMS, you can disable the PT deduction at the individual employee level through their Statutory Details. Ensure you document the reason for exemption.

PT Reports

Available Reports

Generating the PT Report

1. From the sidebar, click Reports.
2. Select Professional Tax Report (or Statutory Reports > Professional Tax).
3. Choose the Month and Year (or select Annual for the full-year report).
4. Optionally filter by Office to see PT data for a specific location.
5. Click Generate.
6. Review the report and click Export to download in Excel or PDF format.

Filing Requirements

PT filing requirements vary by state. Below is a general overview:

State-Specific Filing

Warning: Penalties for late payment of Professional Tax vary by state. Common penalties include interest at 1.25% to 2% per month on the unpaid amount. Some states also impose additional penalties for late return filing.

Multi-State Configuration

If your organization has offices in multiple states, you must configure PT separately for each state.

Configuration Steps for Multi-State Organizations

1. Ensure each office has the correct state assigned in its address.
2. Enter the PT Number for each office.
3. Configure PT slabs for each state where you have offices.
4. Verify that employees are assigned to the correct office.
5. When running payroll, Udyamo HRMS automatically applies the correct state's PT slabs to each employee based on their office assignment.

Troubleshooting

Next Steps

• Configure TDS for income tax compliance — see TDS — Tax Deducted at Source
• Set up Statutory Bonus and Gratuity — see Statutory Bonus & Gratuity
• Review the full payroll workflow — see Running Payroll