Professional Tax in Karnataka: Registration, Slabs, and Filings
Karnataka PT slabs, enrolment vs registration certificates, monthly deposit, and annual return.
Professional tax in Karnataka is payable by eligible salaried employees and persons carrying on specified professions, trades or businesses. For FY 2025-26, employees earning ₹25,000 or more per month pay ₹200 in each month except February, when ₹300 applies, making the annual total ₹2,500. Employers deduct and remit employee PT, while separately liable professionals and businesses obtain enrolment and pay their own tax. Registration, payment and filing obligations must be tracked separately.
What is professional tax in Karnataka, and which law applies?
Professional tax is a Karnataka state levy on specified professions, trades, callings and employment, separate from income tax and GST.
The governing legislation is the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976. The charging provision is Sec. 3 Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976, read with its Schedule.
Article 276(2) Constitution of India limits professional tax to ₹2,500 per person per year. This is an annual ceiling, not a universal ₹200 monthly ceiling.
For FY 2025-26, corresponding to AY 2026-27 for income-tax purposes, the Income-tax Act, 1961 continues to govern the income-tax treatment of PT. Karnataka law determines the PT liability itself.
Who needs to pay professional tax in Karnataka?
Eligible employees and persons falling within the statutory Schedule must pay PT, but their compliance routes differ.
The principal categories include:
- Salaried employees: Employers deduct PT from salary or wages where the applicable threshold is met.
- Self-employed professionals: Doctors, lawyers, chartered accountants and consultants may need enrolment and direct payment, subject to their Schedule entry and exemptions.
- Businesses and other entities: Companies, firms and other establishments can have their own enrolment liability.
- Company directors: Liability depends on the relevant Schedule entry and the person’s circumstances; being a director does not automatically make every receipt salary.
Do not apply the employee salary slab to professional fees, business turnover or director remuneration without checking the relevant category. Non-salary entries can have different qualifying conditions.
An employer may therefore have two obligations: deducting PT for employees and paying its own enrolment tax.
What are the Karnataka professional tax slabs for FY 2025-26?
Employees earning ₹25,000 or more per month pay ₹200 monthly, except ₹300 for February 2026.
| Monthly salary or wages | April 2025 to January 2026 | February 2026 | March 2026 | Annual PT if the same slab applies throughout |
|---|---|---|---|---|
| Below ₹25,000 | Nil | Nil | Nil | Nil |
| ₹25,000 or more | ₹200 per month | ₹300 | ₹200 | ₹2,500 |
The earlier statement that Karnataka’s maximum monthly PT is ₹200 is outdated for FY 2025-26. The February increase brings a full year’s employee liability to the constitutional ceiling of ₹2,500.
Payroll should use salary or wages as defined under Karnataka PT law, rather than net take-home pay after PF, TDS and other deductions. Review variable payments and allowances where their treatment affects the threshold.
Employees who join, leave or move between salary bands require a month-specific calculation. Do not automatically deduct ₹2,500 from every employee.
How do employer registration and professional enrolment differ?
Employer registration covers employee deductions, while enrolment covers the applicant’s own professional tax liability.
Both are addressed under Sec. 5 Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976.
| Compliance point | Employer registration | Professional or business enrolment |
|---|---|---|
| Purpose | Deduct and remit employee PT | Pay the person’s or entity’s own PT |
| Typical applicant | Employer with employees liable to PT | Liable professional, business or entity |
| Calculation | Employee-wise salary slabs | Applicable Schedule category |
| Payment pattern | Periodic payroll-linked compliance | Generally annual payment |
| Can both apply? | Yes | Yes |
The employer’s deduction and payment responsibility arises under Sec. 4 Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976.
Applications are generally required within 30 days of becoming liable. A GST registration, PAN or Shops and Establishments registration does not replace PT registration or enrolment.
For multiple branches, review the registered locations and departmental requirements rather than assuming that one account automatically covers every Karnataka establishment.
How do you register and maintain the required records?
Apply through Karnataka’s professional tax system with the relevant identity, business and employment information, then maintain records supporting each payment.
Documents and information commonly required include:
- PAN and the applicant’s legal name.
- Constitution documents, such as incorporation or partnership records.
- Karnataka business address and supporting proof.
- Authorised signatory details.
- Employment commencement details and payroll information.
- Professional or business category for enrolment.
Requirements vary by applicant type. Ensure consistency across PAN, incorporation records, payroll and the application.
After approval, retain the certificate, account details, returns or statements, payment challans and employee-wise calculations. Update material changes and apply for cancellation when appropriate. Simply stopping payments does not close an active account.
When are professional tax payments and filings due?
Monthly employer compliance and annual enrolment payments follow different deadlines, so they need separate calendar entries.
For employers on monthly compliance, the monthly statement and payment are generally due by the 20th of the following month. For example, April 2025 payroll PT is ordinarily due by 20 May 2025.
Confirm the filing frequency applicable to the registration and complete any prescribed reconciliation or annual filing requirement. A payment challan should not be treated as proof that every required statement has been submitted.
For persons already enrolled at the beginning of the financial year, annual enrolment tax is ordinarily due by 30 April. Thus, the usual due date for FY 2025-26 was 30 April 2025. Newly enrolled persons have separate payment timelines; they should not automatically wait until the next April.
Late compliance can attract interest, penalties or recovery action. Outstanding tax, delayed statements and unfiled applications should be reviewed separately, since paying the principal tax alone may not resolve every default.
How much PT would a Bengaluru business handle in practice?
A business with eight employees continuously above the salary threshold would deduct ₹20,000 in employee PT during FY 2025-26.
Assume a Bengaluru company has:
- Eight employees earning ₹30,000 per month.
- Four employees earning ₹24,000 per month.
- No applicable employee exemptions.
- A separate annual enrolment liability of ₹2,500 under its applicable Schedule entry.
The calculation is:
| Component | Calculation | Amount |
|---|---|---|
| Employee PT for 11 ordinary months | 8 × ₹200 × 11 | ₹17,600 |
| Employee PT for February 2026 | 8 × ₹300 | ₹2,400 |
| PT for four employees below ₹25,000 | 4 × ₹0 | Nil |
| Total employee PT | ₹17,600 + ₹2,400 | ₹20,000 |
| Company’s own enrolment tax | Assumed applicable annual liability | ₹2,500 |
| Total remitted across both obligations | ₹20,000 + ₹2,500 | ₹22,500 |
The ₹20,000 is normally recovered from employee salaries, not an additional employer expense. The company’s own ₹2,500 liability is separate. Professional fees, interest and penalties are excluded.
Is professional tax deductible from taxable income?
Employees can deduct PT actually paid under the old income-tax regime, but not under the new regime.
The salary deduction is available under Sec. 16(iii) Income-tax Act, 1961. It depends on payment, not merely an amount becoming due.
This deduction is unavailable when income is computed under Sec. 115BAC Income-tax Act, 1961. Nevertheless, choosing the new regime does not remove the Karnataka PT obligation.
How SP & SC helps
SP & SC Legal and Taxation Services helps Bengaluru employers and professionals identify, regularise and maintain their Karnataka PT obligations.
We review registration versus enrolment, Schedule classification, payroll deductions, payment records and outstanding filings. We also help assess notices and historical shortfalls before corrective submissions.
Our fees are a fixed quote after reviewing the case. Contact SP & SC for a case-specific compliance review.
Frequently asked questions
Karnataka PT liability depends on the applicable category, monthly earnings where relevant, and statutory exemptions.
Is PT payable at exactly ₹25,000 monthly salary?
Yes. The employee slab applies at ₹25,000 and above, unless an exemption applies.
Is February PT ₹300 for every employee?
No. For February 2026, ₹300 applies to employees within the taxable salary slab, subject to exemptions.
Must a freelancer register as an employer?
Not solely because they freelance. They should check personal enrolment liability; employer registration becomes relevant when they employ persons liable to PT.
Are exemptions available?
Yes. Specified exemptions, including certain disability-related exemptions, require checking the current provisions, conditions and supporting documents.
Does selecting the new income-tax regime stop PT deductions?
No. Karnataka PT remains payable. Only the salary deduction for PT under the Income-tax Act is unavailable under the new regime.
Written by
SP & SC Editorial
Editorial team at SP & SC Legal and Taxation Services — practising advocates, chartered accountants, and company secretaries publishing hands-on guidance from live client files.
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