State P-Tax Calculator
Select state of posting and enter monthly gross salary to calculate deduction
State P-Tax Deduction Summary
Sec 16(iii) DeductibleMonthly gross exceeding ₹10,000 attracts ₹200/month (March to January) and ₹300 in February.
Professional Tax Rules in India: Legal Framework & Slabs
Professional Tax (P-Tax) is a state-level tax imposed on individuals earning an income through salary, professions, or trade. Unlike Income Tax which is levied by the Central Government, Professional Tax is governed by State Governments under Entry 60 of List II (State List) of the Seventh Schedule to the Constitution of India.
Constitutional Ceiling: Article 276(2)
Under Article 276(2) of the Constitution of India, the maximum tax payable by any person by way of taxes on professions, trades, callings, and employments cannot exceed ₹2,500 per annum.
Section 16(iii) Income Tax Exemption
Under Section 16(iii) of the Income Tax Act, 1961, any amount paid towards state professional tax during the financial year is 100% deductible from gross salary when computing taxable salary under the Old Tax Regime.
Frequently Asked Questions (Professional Tax)
Why does Maharashtra deduct ₹300 in February?
In Maharashtra, the statutory annual limit is ₹2,500. To reach this total exactly, ₹200 is deducted in 11 months (March through January = ₹2,200) and ₹300 is deducted in February, totaling ₹2,500.
Is Professional Tax deductible under the New Tax Regime?
No. Under the New Tax Regime (Section 115BAC), deductions under Section 16(iii) for professional tax are not allowable, as they are replaced by the higher ₹75,000 standard deduction.