Salaried Employees

• These are individuals employed under a formal employer-employee relationship and receive a fixed monthly salary or wages.
  
• Employers are responsible for deducting PT at source and remitting it to the state authority.
  
• The PT amount is based on the gross monthly salary and applicable state-specific slab rates.
  
• All private sector, government, and public sector employees fall under this classification.
  
• PT returns must reflect each salaried employee’s details and deductions.
  

Contractual and Temporary Employees

• Workers hired for a fixed term, project, or contract are treated similarly to regular salaried employees for PT purposes.
  
• If paid a monthly remuneration, and if it crosses the applicable threshold, PT must be deducted.
  
• Employers must include them in monthly deduction schedules and filings.
  
• They are subject to PT deduction as long as there is an employer-employee arrangement.
  
• PT compliance applies even for temporary engagements if salary conditions are met.
  

Commission-Based and Incentive-Based Workers

• Individuals earning solely through commission or incentives, without a fixed salary, may fall under either salaried or self-employed classification.
  
• If considered employees, employers must deduct PT on total earnings, including commissions.
  
• If treated as independent professionals, they are liable to register and pay under PTEC.
  
• Classification depends on the nature of the engagement contract and income structure.
  
• Proper distinction ensures correct PT compliance and audit clarity.
  

Self-Employed Professionals and Business Owners

• This category includes individuals like doctors, lawyers, consultants, freelancers, traders, and entrepreneurs.
  
• They must obtain a Professional Tax Enrollment Certificate (PTEC) and pay PT annually.
  
• PT liability arises only if their annual income exceeds the state’s exemption threshold.
  
• The tax is paid directly by the individual, not through salary deduction.
  
• Failure to register and pay can attract penalties and interest.
  

Exempt Employees

• Certain employee categories are exempt from PT deduction, such as:
  
  • Senior citizens (age 60+).
    
  • Disabled persons with valid medical certification.
    
  • Members of armed forces and auxiliary services (in some states).
    
• Exemptions must be declared and documented to ensure no wrongful deduction.
  
• These employees are excluded from both deduction and PT return filings.