Professional Tax in Delhi

No PT deduction needed

Employers with staff working in Delhi do not need to register for or deduct professional tax for those employees. If you also have employees in states that levy PT, such as Maharashtra or Karnataka, you must register there.

When a Delhi payroll still has PT

Professional tax follows the place where the employee works, not the head office, so a Delhi company can still owe PT in two situations.

• A branch or site in a PT state. Staff attached to an office in Pune or Bengaluru are taxed under that state's Act. The employer takes a registration certificate in that state and deducts, pays and files there, even though payroll runs from Delhi.
• A transfer during the year. If an employee moves from Delhi to a PT state, deduction starts with the first salary for work there. Nothing is recovered for the months spent in Delhi.

The reverse also holds. An employee of a Mumbai company who is posted to Delhi stops paying Maharashtra PT once their place of work changes.

What a Delhi payslip should show

The PT line should be blank or zero. If a Delhi employee sees a PT deduction, the payroll software usually has the wrong work location on their record. Ask HR to correct the location and refund what was deducted. PT is owed to the state where you work, and no other state can collect it.

ESI and PF are central schemes, so they apply in Delhi exactly as they do everywhere else.