Professional tax in Punjab (FY 2026-27)
Punjab is often listed as a state with no professional tax. It is not. It charges a flat ₹200 a month under a differently named Act, which your employer deducts from your salary.
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How much you pay
- ₹200 every month, including February, for a yearly total of ₹2,400.
- It is called the Punjab State Development Tax, but it is a tax on professions, trades, callings and employments under Article 276, which is why the annual figure sits just under the ₹2,500 constitutional ceiling.
- Employers deduct it at source, and it is deductible from taxable salary in the old regime like any other professional tax.
Worked examples
Calculated with the same engine as the calculator, on a monthly gross salary:
| Monthly salary | What is deducted | Year total |
|---|---|---|
| ₹15,000 | Nothing | ₹0 |
| ₹25,000 | ₹200 a month | ₹2,400 |
| ₹50,000 | ₹200 a month | ₹2,400 |
| ₹1,00,000 | ₹200 a month | ₹2,400 |
What counts as salary
Applies to employees liable to income tax, regardless of the exact salary.
Who is exempt
- People whose income is below the threshold at which income tax is payable
Where these figures come from
Punjab State Development Tax Act 2018 (Punjab Act 11 of 2018), still in force in 2026.
Punjab has not published a readable clarification of the income threshold since the Income-tax Act, 2025 replaced the 1961 Act. We apply the levy above the basic exemption limit.
Does it reduce your income tax?
Only in the old regime. Professional tax is deductible from salary under section 19(1) of the Income-tax Act, 2025, and section 202(2) removes that deduction for anyone taxed under the new regime.
See what this means for your take-home pay in Punjab