State-Specific Threshold Criteria

• The threshold income level for professional tax deduction is not uniform across India.
  
• Each state sets its own minimum income limit below which individuals are exempt from PT.
  
• This threshold is typically based on monthly gross salary or professional income.
  
• Employers and professionals must refer to the respective state’s PT Act or notification to determine applicable limits.
  
• The threshold ensures that low-income earners are not burdened with this tax.
  

Common Monthly Threshold Ranges Across States

• In most states, the threshold for salaried individuals ranges between ₹7,500 and ₹15,000 per month.
  
• For example:
  
  • Maharashtra: ₹7,500 for men, ₹10,000 for women.
    
  • Karnataka: ₹15,000.
    
  • Tamil Nadu: No PT for income below ₹21,000 per half-year.
    
• If monthly income falls below the specified threshold, no PT is deducted.
  
• Exemption is applied automatically through payroll or manually for self-assessed professionals.
  

Separate Rules for Salaried and Self-Employed Individuals

• Salaried employees are assessed monthly by employers for PT applicability.
  
• Self-employed individuals must calculate their annual income or turnover against the state’s slab to determine liability.
  
• If their income remains below the annual exemption threshold, no tax is payable.
  
• Registration may still be required in some states even if no tax is due.
  
• Professional tax applies only when income crosses the minimum limit during the period.
  

Impact on Deduction and Return Filing

• Employers must ensure no PT deduction is made for employees below the threshold.
  
• These employees should also be excluded from return filings for that tax period.
  
• Self-employed individuals under the threshold need not pay or file returns, unless specified.
  
• If income fluctuates, PT should be deducted only in the months where income crosses the limit.
  
• Misapplication of PT on exempt employees may result in refunds or payroll corrections.
  

Documentation and Audit Compliance

• Maintain salary records, income proofs, and exemption declarations for all individuals under the threshold.
  
• These documents serve as proof during audits or inspections by the professional tax authority.
  
• Payroll systems must be configured to automatically apply exemption rules based on income inputs.
  
• Regular review of state notifications is essential to stay updated on revised threshold limits.