📌 Annual Professional Tax in Karnataka — Key Compliance Guide

What is Professional Tax?
Professional Tax (PT) is a state-levied direct tax under the Karnataka Tax on Professions, Trades, Callings & Employments Act, 1976 applicable to individuals, professionals and entities engaged in any profession, trade, calling or employment within Karnataka.

Who Must Pay Professional Tax?
✔ Salaried individuals with monthly gross income ≥ ₹25,000.
✔ Self-employed professionals (e.g., CA, doctors, lawyers, freelancers) with standing in profession >120 days in the year.
✔ Business entities (companies, LLPs, partnerships, sole proprietors, HUFs, societies, clubs) operating in Karnataka.

Who is Exempt?
🚫 Individuals aged 60+
🚫 Persons with ≥40% disability
🚫 Armed Forces personnel
🚫 Self-employed working <120 days in a year

🚫 Low-income employees below threshold
🚫 Other specific exemptions as notified in Act.

Tax Slab & Amount
📌 Salaried Employees:
• ₹0 if monthly salary ≤ ₹24,999
• ₹200/month for 11 months + ₹300 in February = ₹2,500 per annum (maximum).

📌 Self-Employed & Entities:
• Fixed ₹2,500 per annum per entity / place of business (Professional Tax Enrollment).

Registration Requirements
• PT Registration Certificate (PTRC): Required for employers to deduct & remit PT for employees.

• PT Enrollment Certificate (PTEC): Self-employed professionals & business entities must obtain within 30 days of commencement.

When to Pay
🗓 Salaried / Employer Deducted PT: By 20th of succeeding month for monthly deductions.
🗓 Annual PT for Self-Employed / Entities: Typically by 30th April for the financial year (confirm on portal).

Returns & Compliance
✔ Employers file monthly PT returns (Form 5 / Form 5A) via Karnataka e-PRERANA portal.
✔ Self-employed/entities file Annual Return (Form 4A) where applicable.

Penalty for Late Payment
⚠️ 1.25% per month interest on outstanding PT; may extend up to 50% of tax due.

Strategic Compliance Tips
✔ Integrate PT deductions into payroll workflows.
✔ Maintain PT Enrollment/Registration certificates per location.

✔ Use Karnataka e-PRERANA portal for timely payment & filing.