Professional Tax Explained: Who Pays It, Which States Levy It, and Does It Impact Your CTC?
In India, taxes are a part of everyday financial life. Whether you buy goods, earn a salary, or run a business, some form of tax applies. We often hear about income tax and GST , but there is one tax that silently gets deducted from many salaries every month and still confuses people — professional tax . Many employees notice a small deduction in their salary slip and wonder: What is professional tax? Why am I paying it? Is it part of my CTC? If you have similar questions, this article will clear all your doubts. What Is Professional Tax? Professional tax is a direct tax levied by state governments in India on individuals who earn income through employment, profession, trade, or business. Despite its name, professional tax is not limited to professionals like doctors or lawyers. It applies to: Salaried employees Self-employed individuals Business owners Professionals across various fields For salaried individuals, employers deduct professional tax from the salary and deposit it ...