Professional Tax

Professional Tax (PT) is a state-level tax levied on employment income in India. India Payroll automates PT deduction on every Salary Slip save based on the employee's Employment State and Gross Pay.

Statutory reference: Article 276 of the Constitution limits PT to ₹2,500 per person per year.

1. How to Enable

1. Go to Payroll Settings → India Payroll tab.
2. Check Enable Professional Tax Deduction.
3. Save.

Once enabled, the Professional Tax salary component is automatically injected into (or removed from) each Salary Slip's deductions table when the slip is saved.

2. How It Works

The hook (apply_professional_tax) runs on Salary Slip.before_save:

Salary Slip (before_save)
    │
    ├─ enable_professional_tax in Payroll Settings? → NO → skip
    ├─ salary_structure set? → NO → skip
    ├─ employment_state from SSA → not in PT states? → skip
    │
    ├─ frequency = monthly?
    │       └─ _compute_pt_monthly(gross_pay, state_config, month, gender)
    │
    └─ frequency = half-yearly?
            └─ _compute_pt_half_yearly(doc, state_config)
                  └─ cumulative gross across submitted slips in period
                     − already deducted PT = this month's PT

The computed amount replaces any existing Professional Tax row and recalculates total_deduction and net_pay.

3. Employment State

PT is determined by the Employment State set on the Salary Structure Assignment (not the Employee master's state field). This allows an employee transferred mid-year to have the correct PT rule applied per assignment.

To set it:

1. Open the Salary Structure Assignment for the employee.
2. Set Employment State.

Validation: When PT is enabled, saving a Salary Structure Assignment without an Employment State throws an error, preventing silent mis-deduction.

4. Supported States & Rate Tables

Monthly States

These states deduct PT every month based on gross pay slabs.

Half-Yearly States

These states compute PT on a cumulative basis across each half-year period (Apr–Sep or Oct–Mar). The full slab amount is charged in the first month of the period, and nothing more until the next period.

5. Special Rules

Maharashtra — February Rule

Maharashtra employees earning above ₹10,000/month pay ₹300 in February instead of the usual ₹200. This ensures the annual total equals the constitutional cap of ₹2,500:

11 months × ₹200 + February × ₹300 = ₹2,500

This is handled automatically by the hook — no configuration required.

Maharashtra — Women Exemption

Women earning ≤ ₹10,000/month are fully exempt from Professional Tax in Maharashtra. The hook reads the gender field from the Employee master and sets PT to ₹0 automatically.

Half-Yearly Incremental Logic (Kerala, Tamil Nadu)

For half-yearly states the hook:

1. Sums gross_pay from all submitted salary slips in the current half-year period (excluding the current unsaved slip).
2. Adds the current slip's gross pay → cumulative figure.
3. Applies the state slab to the cumulative → total PT due for the period.
4. Subtracts PT already deducted in prior slips of the same period.
5. Charges the remainder (minimum ₹0) on the current slip.

Result: PT is front-loaded in the first month of the period, and zero in subsequent months once the slab amount is paid.