Professional tax is a tax that states levy on income earned from employment, trades, callings and professions. It is separate from income tax and is administered at the state level, so the rules differ from one state to another. Here's how professional tax works in Telangana and Andhra Pradesh, who has to register, and what the obligations are for employers and the self-employed.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-15
Quick answer
Professional tax is a state levy on income from employment, trade and professions. Here's how it works in Telangana and Andhra Pradesh, who must register, and what employers have to do.
Professional tax is a state-level levy on people who earn an income from salary, a profession, a trade or a calling. Despite the name, it is not limited to professionals — it applies to salaried employees, business owners and self-employed people alike. It is deducted or paid periodically and is a deductible expense for income-tax purposes. Because it is a state subject, both the rates and the rules are set by the individual state, which is why Telangana and Andhra Pradesh administer it under their own legislation.
In both Telangana and Andhra Pradesh, professional tax applies to salaried employees, professionals such as doctors, lawyers and consultants, traders, and companies and firms carrying on business in the state. The amount payable typically depends on income or salary slabs, with those below a basic level generally exempt. Because the slabs and exemption levels are set by the state and revised from time to time, confirm the current slab that applies to you rather than relying on an old figure. The basic structure is broadly similar across the two states.
There are two distinct registrations to be aware of. An employer needs a registration certificate to deduct and deposit professional tax on behalf of its employees. Separately, a person carrying on a profession, trade or business needs an enrolment certificate to pay tax on their own account. A business that has employees and is itself liable usually needs both. Apply for these with the state's commercial taxes department soon after you become liable, because the obligation generally starts from when you commence the activity, not from when you register.
If you employ people, professional tax is largely your responsibility to administer. You deduct the applicable amount from each employee's salary according to the state slab, and deposit it with the state government within the prescribed time, filing the periodic returns the state requires. You must keep records of the deductions and deposits. Getting this wrong attracts interest and penalties, so build professional-tax deduction into your payroll process and treat it with the same discipline as TDS on salary.
If you are self-employed or run a business, you pay professional tax on your own account under your enrolment certificate. This is usually a periodic payment based on the slab that applies to your income or category. Keep your enrolment current and pay within the due dates, because late payment generally attracts interest and penalty. If you operate in more than one state, remember the levy is state-specific, so an obligation in Telangana or Andhra Pradesh does not cover you elsewhere, and vice versa.
No — professional tax is a state levy, so rates, slabs and exemptions differ by state. Telangana and Andhra Pradesh each administer it under their own legislation. The broad structure is similar, but you should confirm the current slab that applies to you in the relevant state rather than assuming a figure from elsewhere.
A registration certificate lets an employer deduct and deposit professional tax for its employees; an enrolment certificate lets a person pay it on their own account. A business with employees that is itself liable usually needs both, applied for through the state's commercial taxes department.
The employer is responsible for deducting it from the employee's salary and depositing it with the state. The employer deducts the slab amount, deposits it within the prescribed time and files the periodic returns, so for salaried staff it is handled through payroll rather than by the employee directly.
Need help with professional tax registration or returns in Telangana or Andhra Pradesh? Write to the firm and we'll get you enrolled and keep your filings compliant.