Professional Tax

Professional Tax

Professional Tax (PT) is a state-level tax levied on employment income in India. India Payroll automates PT deduction on every Salary Slip update based on the employee’s Employment State and Gross Pay.

Statutory reference: Article 276 of the Constitution limits PT to ₹2,500 per person per year.

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1. How to Enable

1. Go to Payroll Settings → India Payroll tab.
2. Check Enable Professional Tax Deduction.
3. Save.

Enabling Professional Tax Deduction

Once enabled, the Professional Tax salary component is automatically injected into (or removed from) each Salary Slip’s deductions table when the slip is saved.

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2. How It Works

The apply_professional_tax method runs via apply_regional_deductions hook:

Salary Slip (before_save)
    │
    ├─ enable_professional_tax in Payroll Settings? → NO → skip
    ├─ salary_structure set? → NO → skip
    ├─ employment_state from SSA → not in PT states? → skip
    │
    ├─ frequency = monthly?
    │       └─ _compute_pt_monthly(gross_pay, state_config, month, gender)
    │
    └─ frequency = half-yearly?
            └─ _compute_pt_half_yearly(doc, state_config)
                  └─ cumulative gross across submitted slips in period
                     − already deducted PT = this month's PT

The computed amount replaces any existing Professional Tax row.

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3. Employment State

PT is determined by the Employment State set on the Salary Structure Assignment (not the Employee master’s state field). This allows an employee transferred mid-year to have the correct PT rule applied per assignment.

To set it:

1. Open the Salary Structure Assignment for the employee.
2. Set Employment State.

Validation: When PT is enabled, saving a Salary Structure Assignment without an Employment State throws an error, preventing silent mis-deduction.

Employment State in Salary Structure Assignment

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4. Supported States & Rate Tables

Monthly States

These states deduct PT every month based on gross pay slabs.

State	Slab (Gross ≤)	PT Amount (₹/month)
Andhra Pradesh	15,000	0
	20,000	150
	Above 20,000	200
Assam	10,000	0
	15,000	150
	25,000	180
	Above 25,000	208
Bihar	25,000	0
	Above 25,000	200
Gujarat	5,999	0
	8,999	80
	11,999	150
	Above 11,999	200
Jharkhand	25,000	0
	Above 25,000	100
Karnataka	25,000	0
	41,666	150
	Above 41,666	200
Madhya Pradesh	18,750	0
	25,000	125
	33,333	167
	Above 33,333	208
Maharashtra	7,500	0
	10,000	175
	Above 10,000	200 (₹300 in February)
Meghalaya	4,166	0
	6,250	16
	…	…
	Above 37,500	208
Odisha	13,304	0
	25,000	125
	41,666	167
	Above 41,666	208
Sikkim	20,000	0
	30,000	125
	40,000	150
	Above 40,000	200
Telangana	15,000	0
	20,000	150
	Above 20,000	200
Tripura	7,500	0
	15,000	150
	Above 15,000	208
West Bengal	8,500	0
	10,000	90
	15,000	110
	25,000	130
	40,000	150
	Above 40,000	200

Half-Yearly States

These states compute PT on a cumulative basis across each half-year period (Apr–Sep or Oct–Mar). The full slab amount is charged in the first month of the period, and nothing more until the next period.

State	Period	Slab (Cumulative Gross ≤)	PT Amount (₹/half-year)
Tamil Nadu	Apr–Sep / Oct–Mar	21,000	0
		30,000	135
		45,000	315
		60,000	690
		75,000	1,025
		Above 75,000	1,250
Kerala	Apr–Sep / Oct–Mar	11,999	0
		17,999	120
		29,999	180
		44,999	480
		59,999	720
		74,999	1,080
		99,999	1,440
		Above 99,999	1,560

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5. Special Rules

Maharashtra — February Rule

Maharashtra employees earning above ₹10,000/month pay ₹300 in February instead of the usual ₹200. This ensures the annual total equals the constitutional cap of ₹2,500:

11 months × ₹200 + February × ₹300 = ₹2,500

This is handled automatically by the hook, no configuration required.

Maharashtra - Women Exemption

Women earning ≤ ₹10,000/month are fully exempt from Professional Tax in Maharashtra. The hook reads the gender field from the Employee master and sets PT to ₹0 automatically.

Half-Yearly Incremental Logic (Kerala, Tamil Nadu)

For half-yearly states, the hook:

1. Sums gross_pay from all submitted salary slips in the current half-year period (excluding the current unsaved slip).
2. Adds the current slip’s gross pay → cumulative figure.
3. Applies the state slab to the cumulative → total PT due for the period.
4. Subtracts PT already deducted in prior slips of the same period.
5. Charges the remainder (minimum ₹0) on the current slip.

Result: PT is front-loaded in the first month of the period, and zero in subsequent months once the slab amount is paid.