Punjab's equivalent of professional tax is the Punjab State Development Tax (PSDT): a flat ₹200 a month on salaried persons who pay income tax. The employer deducts it, holds a certificate of registration, pays by challan PSDT-8 and files the annual return PSDT-6 by 31 August. Late payment carries 2% a month simple interest.
Professional tax slabs in Punjab
Professional tax in Punjab is levied under the Punjab State Development Tax Act, 2018. It is charged on monthly salary and deducted every month. The rates below are the Act's Schedule, in force from publication on 19 April 2018, as published on the official source listed at the end of this page (checked 21 October 2026). Article 276 of the Constitution caps professional tax at ₹2,500 a year per person.
| Who | Rate |
|---|---|
| Persons assessable under "income from salaries and/or wages" who pay income tax | ₹200 a month |
| Persons below the income-tax threshold (see below) | Nil |
| Senior citizens, as per the Income-tax law | Exempt |
Section 4 limits the tax to persons whose taxable income, before deducting this tax, exceeds the basic exemption limit by at least the tax amount. A State Tax Commissioner letter of 13 December 2024 gave the limits as ₹2,50,000 (old regime) and ₹3,00,000 (new regime) for 2023-24 and 2024-25; ask the department for its current guidance.
Who deducts it and registration
Section 5 makes the employer deduct the tax. Section 6 requires employers to hold a certificate of registration; persons paying their own tax hold a certificate of enrolment. Registration is on the PSDT portal, with a 2025 SOP setting 14 working days and deemed approval after that. Rule 12 says non-government employers deduct the scheduled amount every quarter, and government drawing officers settle the whole year by the February salary.
The employee does not pay separately when the employer deducts: the deduction on the payslip is the employee's tax, and the employer is liable if it fails to deduct or pay.
Exemptions
- Senior citizens, as defined under the Income-tax law
- Persons whose income does not cross the basic exemption threshold described above
Due dates and payment
- Tax deducted by an employer is paid every month within the prescribed time (section 10(2)).
- Annual return PSDT-6 (employer) and PSDT-7 (person) by 31 August, after the PSDT (First Amendment) Rules, 2022 changed the date from 30 April. The department's older calendar still shows 30 April.
- Enrolled persons pay within one month from the end of the month of enrolment (section 10(3)).
Keep the challan or payment receipt for each period and reconcile it with the payroll register: a mismatch between what payslips show and what was paid is the most common finding when the department checks an employer.
Penalties and interest
From the Act and Rules as published on the official site:
- Employer fails to deduct or pay: simple interest of 2% a month or part of a month (section 11).
- Late registration or enrolment: ₹50 a day; late return: ₹50 a day (section 19).
- False information: ₹5,000; non-payment: 50% of the tax due (section 19).
Worked example: Punjab
A Ludhiana hosiery exporter has 40 staff. 25 earn less than the income-tax threshold and 15, earning ₹45,000 to ₹90,000 a month, pay income tax.
- 25 staff below the threshold: nil.
- 15 income-tax payers: ₹200 each, ₹3,000 a month, ₹36,000 a year.
- If a payment of ₹3,000 is two months late, interest at 2% a month is ₹120.
Getting PT right on every payslip
- Use the gross salary for the month to pick the slab, and recheck after every raise or arrears payment.
- Register in each state where you employ people: PT follows the place of work, not the head office.
- Show PT as a separate deduction on the payslip, next to PF, ESI and TDS.
- Under the new income-tax regime PT is not deductible from salary income; under the old regime it is.
Check take-home pay with the salary calculator, the employer and employee shares with the PF calculator and ESI calculator, and show every deduction clearly using the salary slip format. FundRaksha HR calculates professional tax with PF, ESI and TDS on each payroll run and produces the PT, PF ECR and ESI files, so the deduction on the payslip and the amount paid agree. Compare all states on the professional tax slabs by state page.
Sources
- taxation.punjab.gov.in/attachments/attachment0015236141020201602663756_punjab_state_develo
- taxation.punjab.gov.in/attachments/attachment0015538141020201602663938_Punjab%20State%20De
- taxation.punjab.gov.in/attachments/attachment0044919301220241735557559_Letter%20dated%2013
- taxation.punjab.gov.in/attachments/attachment0120541140220221644820541_Final_Gazette_Repor
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.