Professional tax in Punjab: slabs, rules and deadlines for 2026
Punjab is the state that will not appear on most professional tax lists — and where a deduction nonetheless shows up on payslips. The reason is that Punjab does not levy "professional tax" at all. It levies a State Development Tax, which does the same job under a different name.
| Monthly salary | Professional tax |
|---|---|
| Up to ₹20,833 / month | Nil |
| Above ₹20,833 / month | ₹200/month |
Punjab's State Development Tax: ₹200/month for anyone with income above the income-tax basic exemption (~₹2.5 lakh/yr shown here as ₹20,834/month).
The law that applies in Punjab
Professional tax in Punjab is levied under the Punjab State Development Tax Act, 2018, administered by the Punjab Department of Excise and Taxation. Article 276 of the Constitution caps what any state may charge a person under this head at ₹2,500 a year, which is why no slab anywhere in India exceeds that figure.
Who must register in Punjab
Employers register under the Punjab State Development Tax Act, 2018 and deduct from employees whose income exceeds the income-tax basic exemption limit. Persons carrying on a profession, trade or calling on their own account and above that limit register and pay themselves.
Registration is with the Department of Excise and Taxation, not a professional tax authority — which is why searching for "Punjab professional tax registration" tends to lead nowhere useful.
When it must be paid
Employers deduct monthly and remit on the cycle set under the Act and its rules; confirm the current due date with the department, as the 2018 legislation is newer than most and its procedures have been revised since introduction.
Why sources disagree about whether Punjab has professional tax
You will find reputable lists stating that Punjab levies no professional tax, alongside payslips from Punjab showing a ₹200 monthly deduction. Both are right.
Punjab has no enactment called a professional tax Act. What it has is the Punjab State Development Tax Act, 2018, which imposes ₹200 a month — ₹2,400 a year — on persons whose income exceeds the income-tax basic exemption limit. Functionally it is a professional tax: it is a state levy on income from a profession, trade, calling or employment, it is deducted by employers, and it is capped consistently with the ₹2,500 constitutional ceiling on such taxes.
The distinction matters for two practical reasons. Your payroll software may not include Punjab in a professional tax state list, and the deduction may need configuring by hand. And the deduction is tied to the income-tax exemption limit rather than a fixed rupee slab — so if that limit changes in a Budget, the threshold moves with it, which is not true of any other state on this list.
Who is exempt in Punjab
- Anyone whose income does not exceed the income-tax basic exemption limit — which is what the ₹20,833 monthly figure in the table represents.
- Senior citizens.
- Persons with disabilities.
If you pay late
Interest and penalties apply under the 2018 Act for late payment or failure to register.
How it affects your income tax
Professional tax paid is fully deductible from salary income under Section 16(iii) of the Income-tax Act, in both the old and the new regime. Your employer normally accounts for it when computing TDS, so it reduces taxable salary rather than being claimed separately. If you are enrolled and pay directly, keep the challans — the deduction is still available to you.
On a payslip the line usually reads "PT", "Prof. Tax" or "Professional Tax", and sits with provident fund and income tax under deductions. Our free salary slip generator includes it automatically for Punjab.
Common questions about professional tax in Punjab
Does Punjab have professional tax?
Not under that name. Punjab levies a State Development Tax under the 2018 Act of ₹200 a month, which does the same job and is deducted by employers in the same way.
How much is Punjab State Development Tax?
₹200 a month, or ₹2,400 a year, for persons whose income exceeds the income-tax basic exemption limit.
Why does my payroll software not list Punjab?
Because the levy is not called professional tax. Many systems key their state list off that name and omit Punjab, so the deduction has to be set up manually.
Does the threshold change when the Budget changes?
It can. The liability is tied to the income-tax basic exemption limit rather than a fixed rupee figure, so a change to that limit moves the threshold — unlike other states, whose slabs only change when the state amends its own Act.
Professional tax in other states
Slabs, thresholds and filing cycles differ substantially between states. If you employ people in more than one, you will generally need a registration in each.
The maths behind this calculator is open source and tested — try it in the interactive reference, where the edge cases most calculators get wrong are worked through with real numbers, or read the source on GitHub.