Professional Tax in Karnataka 2026 — Rates, Due Dates, and Filing Guide | RushTax Blog

Professional Tax (PT) is a state-level tax levied by Karnataka on salaried employees and self-employed professionals. If you are an employer in Karnataka with employees earning above ₹15,000/month, you must deduct and deposit PT every month. Here is the complete guide for 2026.

What is Professional Tax?

Professional Tax is levied under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976. It applies to:

Employers — must deduct PT from employee salaries and deposit it (PTRC)
Self-employed professionals — must pay PT on their own income (PTEC)

Karnataka PT Rates — FY 2025-26

Monthly Salary	Monthly PT
Up to ₹15,000	Nil
₹15,001 and above	₹200/month

Annual PT: ₹2,400/year for employees earning above ₹15,000/month.

Note: Karnataka PT is capped at ₹2,400/year. There is no higher slab.

Who Needs PTRC vs PTEC?

Registration	Who Needs It
PTRC (Professional Tax Registration Certificate)	Employers who deduct PT from employee salaries
PTEC (Professional Tax Enrolment Certificate)	Self-employed professionals, business owners, directors

Most businesses need both — PTRC for employees and PTEC for the proprietor/director.

PT Due Dates — Monthly Deposits

Month	PT Deposit Due Date
April	May 20
May	June 20
June	July 20
July	August 20
August	September 20
September	October 20
October	November 20
November	December 20
December	January 20
January	February 20
February	March 20
March	April 20

PT must be deposited by the 20th of the following month using the PT-7 challan on the Karnataka Commercial Taxes portal.

Annual PT Return — PT-5

In addition to monthly deposits, employers must file an annual PT-5 return by April 30 of the following year.

For FY 2025-26: PT-5 return due by April 30, 2026 (already passed — if you missed it, file immediately).

The PT-5 return reconciles all monthly deposits and employee-wise PT deductions for the year.

Penalty for Late PT Deposit

1.25% per month on the unpaid PT amount
Penalty for non-registration: up to ₹1,000
Penalty for non-filing of PT-5: up to ₹1,000

How to Register for PTRC/PTEC

Go to ctax.kar.nic.in (Karnataka Commercial Taxes portal)
Click on "New Registration" → Professional Tax
Select PTRC (employer) or PTEC (self-employed)
Fill in business details, PAN, and address
Upload documents (PAN, Aadhaar, address proof)
Submit and get registration certificate

PT Deduction in Employee Salary

PT is deducted from employee salary and is a deductible expense for the employer. For employees, PT paid is deductible under Section 16(iii) of the Income Tax Act — it reduces taxable salary income.

Example:

Gross salary: ₹50,000/month
PT deducted: ₹200/month
Net salary: ₹49,800/month
Annual PT deduction in ITR: ₹2,400 (reduces taxable income)

Frequently Asked Questions

Is Professional Tax applicable to all employees in Karnataka?

PT applies to employees earning above ₹15,000/month. Employees earning ₹15,000 or below are exempt.

Do I need to pay PT if I am a freelancer in Karnataka?

Yes. Self-employed professionals and freelancers in Karnataka must register for PTEC and pay ₹2,500/year (PTEC rate for professionals).

What is the difference between PTRC and PTEC?

PTRC is for employers who deduct PT from employee salaries. PTEC is for self-employed individuals and business owners who pay PT on their own income.

Is PT applicable to companies registered outside Karnataka?

If you have employees working in Karnataka, you must register for PTRC in Karnataka and deduct PT from their salaries.

Can PT be claimed as a deduction in ITR?

Yes. PT paid by an employee is deductible under Section 16(iii) of the Income Tax Act. It reduces your taxable salary income.

Need help with PT registration, monthly deposits, or annual PT-5 return? I handle complete PT compliance for Karnataka businesses. Message me on WhatsApp.