State-Based Tax Liability

• Professional Tax (PT) for remote employees is determined by the state in which the employee physically works or resides, not where the company’s head office is located.
  
• Even if the employer is registered in one state, if the employee works remotely from a different state, PT must be applied as per the employee’s state laws.
  
• Employers are obligated to deduct and remit PT based on the applicable slab rates of the employee’s location.
  
• The PTRC (Professional Tax Registration Certificate) must be obtained in each state where employees are located, if not already registered.
  

Employer’s Compliance Obligation

• Employers must maintain state-wise PT registrations in jurisdictions where remote employees reside and perform work.
  
• Deduction of PT should be accurately reflected in the employee’s payslip and reported in the returns for the correct state.
  
• If remote employees are spread across multiple states, state-specific PT rules, thresholds, and filing requirements must be followed.
  
• Some states allow for centralized filing, but most require branch-wise or location-wise registration and reporting.
  

Remote Location Determines PT Jurisdiction

• The place from where the remote employee actually renders services is treated as the base for PT applicability.
  
• If an employee is temporarily working from a different state (e.g., on deputation or assignment), PT may shift to that location depending on duration and local rules.
  
• Remote workers in a Union Territory that does not levy PT (e.g., Delhi or Chandigarh) are not subject to PT deduction.
  
• Employers must track the employee’s permanent work-from-home address for accurate tax mapping.
  

Exemptions and Threshold Applicability

• Remote employees earning below the minimum salary threshold specified by their residential state are exempt from PT.
  
• Exemptions also apply to remote employees who fall into special categories (e.g., senior citizens, persons with disabilities), subject to documentation.
  
• The employer must verify and document such exemption eligibility before skipping deductions.
  
• Exempt employees must be excluded from return filings for the respective state.
  

Recordkeeping and Audit Preparedness

• Employers must maintain separate PT deduction records for each state based on employee residence.
  
• PT payments and returns must be filed within the due dates set by each state.
  
• Remote work arrangements should be properly documented in employment letters or HR systems for compliance accuracy.
  
• In case of audit, the employer must demonstrate correct deduction, remittance, and state-wise segregation of PT data.