Professional Tax in Karnataka 2026: The Government of Karnataka is committed to ensuring a fair and transparent taxation system for all employers, employees, and professionals in the state. The Professional Tax in Karnataka, governed by the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976, has been updated for 2026 to align with current economic conditions.
This guide provides clear and simple information on professional tax (PT) slab rates, registration, payment processes, exemptions, and compliance requirements to help you stay compliant. Effective from 1st April 2026, these updates aim to support a smooth and lawful workplace environment.
What is Professional Tax?
Professional Tax is a state-level tax levied on individuals earning income through employment, business, or professions in Karnataka. Administered by the Commercial Taxes Department, it applies to salaried employees, self-employed professionals (e.g., doctors, lawyers, chartered accountants), and businesses. The revenue collected supports state initiatives such as infrastructure, healthcare, and welfare programs.
Applicability and Slab Rates
The Karnataka Tax on Professions, Trades, Callings and Employments (Amendment) Act, 2026, outlines the applicability of professional tax for:
- Salaried employees with a gross monthly salary of Rs. 25,000 or more.
- Self-employed professionals engaged in any profession, trade, or calling for more than 120 days in a year.
- Businesses, including GST-registered entities and employers with more than five employees under the Karnataka Shops and Commercial Establishments Act, 1961.
The slab rates for 2026 are:
- For salaried employees earning Rs. 25,000 or more per month: Rs. 200 per month for 11 months and Rs. 300 in February, totaling Rs. 2,500 annually.
- For those earning below Rs. 25,000 per month: Exempt.
- Self-employed individuals and GST-registered businesses: Rs. 2,500 annually, due by 30th April 2026.
How to Registration and Payment Process
Employers must obtain a Professional Tax Registration Certificate (PTRC) to deduct and remit PT from employees’ salaries. Self-employed individuals and businesses need a Professional Tax Enrollment Certificate (PTEC). Follow these steps:
- Register on the e-Prerana portal (https://pt.kar.nic.in) by 30th April 2026. Provide PAN, GSTIN, business details, and address proof.
- Employers deduct Rs. 200 monthly (Rs. 300 in February) and remit by the 20th of the following month via the portal.
- For PTEC, pay Rs. 2,500 annually by 30th April 2026 using the e-payment option.
- File monthly returns by the 20th of the next month, verifying payments with the CTD Reference Number.
Exemptions
The following are exempt from professional tax:
- Individuals earning less than Rs. 25,000 monthly.
- Senior citizens aged 65 and above.
- Persons with permanent disabilities (40% or more) or mental retardation.
- Armed forces members.
- Women agents under the Mahila Pradhan Kshetriya Bachat Yojana.
- Company directors, per Notification-2, 02/2023, dated 13/07/2023.
Penalties for Non-Compliance
Failure to comply may result in:
- Late payment: 1.5% interest per month, capped at 50% of the unpaid amount.
- Non-payment: 10% penalty of the tax due.
- Late filing of returns: Rs. 250 per return.
- Non-registration: Rs. 1,000 for employers, Rs. 500 for others.
Why Compliance Matters
Timely registration, deduction, and payment ensure compliance with the Karnataka Professional Tax Act, avoiding penalties and supporting state development. Employers should update payroll systems by 1st April 2026, and employees should check payslips to confirm deductions.
