Professional Tax in Punjab (2026): State Development Tax, ₹200 a Month, Lump-Sum Option and Due Dates

Punjab is often listed as a state "without professional tax", and that is wrong. Since April 2018 it has collected the Punjab State Development Tax (PSDT) — a tax on professions, trades, callings and employments under Article 276 of the Constitution, just with a different name. It is a flat ₹200 a month, but only for people who pay income tax, which makes it unlike any other state's slab system. This guide is for employers, HR and payroll teams, shopkeepers, doctors, lawyers, CAs and other professionals in Ludhiana, Amritsar, Jalandhar, Mohali, Patiala and the rest of the state. It covers who pays, the 2025 lump-sum option, registration, deposit and return dates, penalties and worked rupee examples.

Quick answer

Punjab's professional tax is the State Development Tax: ₹200 a month (₹2,400 a year) for anyone with salary, business or professional income who is an income-tax payer. Since November 2025 you can instead opt to pay ₹2,200 a year once, by 30 April. Employers deduct monthly and deposit by the last day of the following month; annual returns are due by 31 August.

• Law: Punjab State Development Tax Act, 2018, run by the Department of Excise and Taxation

• No tax if your taxable income (after deductions) is within the income-tax basic exemption limit

• Register or enrol on psdt.punjab.gov.in — your PAN or TAN is the login

• Interest 2% a month on late tax; fixed yearly penalties since 2025

What the Punjab State Development Tax is

The Punjab State Development Tax Act, 2018 (Punjab Act 11 of 2018) was published in the Punjab Gazette on 19 April 2018 and came into force on publication. Its long title describes it as an Act "to provide for the levy and collection of a tax on professions, trades, callings and employment", and section 4(1) makes the levy subject to Article 276 — the same constitutional provision that every other state's professional tax relies on, with the same ₹2,500 a year ceiling per person. So when a payroll provider, a bank or a tender form asks for your "professional tax registration" in Punjab, they mean PSDT.

The tax is administered by the Department of Excise and Taxation. Its designated officers are the same state tax officers who handle GST and VAT, the Joint Commissioner of State Tax (GST) hears first appeals, and payments go into the head 0028 — Other Taxes on Income and Expenditure, Taxes on Professions, Trades, Callings and Employments. Everything is handled on the department's dedicated portal at psdt.punjab.gov.in.

The Act also reaches a little beyond Punjab's borders. It covers offices of the Punjab government and Punjab-controlled bodies located in the state capital, and its definition of "employee" includes Punjab government servants posted outside the state. In practice, though, almost every business only needs to think about people who work in Punjab.

Punjab State Development Tax at a glance (2026)

₹200 a month

Monthly rate

Schedule entries 1 and 2

₹2,200 a year

Lump-sum option

Pay by 30 April

the last day of the following month

Employer deposit

For each month's deductions

31 August

Annual return

PSDT-6 / PSDT-7

Who has to pay: the income-tax payee test

The Schedule has only two charging entries, both at ₹200 a month: people assessable under the income-tax head "Income from Salaries", and people assessable under "Income from Business or Profession". What makes Punjab different is section 4(3). It says the tax applies to these categories only if they are income-tax payees — that is, only if their taxable income for the year, before deducting PSDT itself, exceeds the maximum amount not chargeable to income tax.

The department's own FAQ spells out how to read this. Taxable income is worked out after all the exemptions and deductions the income-tax law allows. Its illustration: someone with gross income of ₹7,00,000 and ₹1,00,000 of deductions has taxable income of ₹6,00,000, which is above the limit, so he pays both income tax and PSDT. The Finance Department's 2020 clarification adds that PSDT itself is not deducted from income at this stage.

Which limit applies? The department's December 2024 letter to all districts lists the income-tax exemption limits it uses: ₹2.5 lakh under the old regime (₹3 lakh for residents aged 60 to 79, ₹5 lakh for those 80 or over), and ₹3 lakh under the new regime for 2023-24 and 2024-25. From 2025-26 the new regime's nil slab rose to ₹4 lakh under the Union Budget. Note that the PSDT test looks at the exemption limit, not at the section 87A rebate. Under a literal reading, a new-regime employee with taxable income of ₹9 lakh pays no income tax because of the rebate, yet still has taxable income above ₹4 lakh. The department's clarifications do not yet address the rebate or the Income-tax Act, 2025, which replaced the 1961 Act from 1 April 2026, so confirm the current position with your designated officer before you stop deducting for staff in that band.

What counts as salary. Section 2(m) includes pay, dearness allowance and all regular remuneration, in cash or kind, plus perquisites and profits in lieu of salary — but not bonus or gratuity. "Regular" means more than 180 days. The 2025 amendment added "from one or more employers", closing a gap for people with two part-time jobs.

Who is a "person" — firms, companies and branches

Section 2(j) defines "person" very widely. It covers anyone engaged in a profession, trade, calling or employment in Punjab, and since the 2025 amendment it adopts the full definition of "person" in the Punjab GST Act — individuals, HUFs, firms, LLPs, companies, societies, trusts, clubs, local authorities, government departments and so on. A business whose head office is outside Punjab is still a "person", acting through its local manager or agent. And the Explanation makes every branch of a firm, company, corporate body, society, club or association a separate person and a separate assessee.

Two groups are excluded: people who earn wages on a casual basis, and agriculturists (and their family members) who sell only produce grown on their own land in Punjab. The Act does not otherwise list exemptions, but the Government can exempt classes by notification.

The department's FAQ draws some practical conclusions. In a partnership firm, the firm and each partner are separate persons, so each may need to enrol — though each one's liability arises only if its own taxable income crosses the limit. A company needs two registrations: one as a person, remitting ₹2,400 a year a year for itself, and one as an employer for its staff. An organisation with no employees above the threshold does not need an employer registration, but it still enrols as a person if it is itself an income-tax payer.

The 2025 lump-sum option: ₹2,200 instead of ₹2,400

The biggest change since 2018 came in two steps. The Punjab State Development Tax (Amendment) Act, 2025 (Punjab Act 10 of 2025) was passed by the Vidhan Sabha in July 2025, received the Governor's assent on 29 July and was published on 9 August 2025. Among other things it added a third entry to the Schedule: persons in entries 1 and 2 "who opt for payment of tax on lump sum basis" pay ₹2,200 a year on annual basis. Section 10(4) makes the lump sum payable by 30 April of the year.

The working rules followed in the PSDT (First Amendment) Rules, 2025, published on 7 November 2025:

• Opting in is done on Form PSDT-17 before the next financial year starts — by 31 March — and is treated as approved from the date you submit it (rule 22).
• Opting out is done on Form PSDT-18, also by 31 March, and takes you back to monthly payments from 1 April (rule 23).
• The challan (Form PSDT-8) now has a column to mark whether the payment is monthly or lump sum.

Monthly payment or lump sum?

	Monthly (default)	Lump sum (opt-in)
Amount for the year	₹2,400 a year	₹2,200 a year
When paid	By the last day of the following month	Once, by 30 April
How to choose	No form needed	Form PSDT-17 by 31 March
Switching back	—	Form PSDT-18 by 31 March
Best for	Employers with changing headcount	Professionals and companies paying for themselves

Amount for the year

Monthly (default)

₹2,400 a year

Lump sum (opt-in)

₹2,200 a year

When paid

Monthly (default)

By the last day of the following month

Lump sum (opt-in)

Once, by 30 April

How to choose

Monthly (default)

No form needed

Lump sum (opt-in)

Form PSDT-17 by 31 March

Switching back

Monthly (default)

—

Lump sum (opt-in)

Form PSDT-18 by 31 March

Best for

Monthly (default)

Employers with changing headcount

Lump sum (opt-in)

Professionals and companies paying for themselves

The saving is ₹200 a year per head, and for an enrolled professional the lump sum also replaces twelve small payments with one. For an employer the trade-off is different. Opting in means paying ₹2,200 per eligible employee by 30 April, at the start of the year, and then recovering it from staff — which works only where staff numbers are stable. If an employee leaves in June, the employer has paid for a full year. Many employers will stay monthly, and use the lump sum only for their own enrolment as a "person".

The amendment Act says its provisions start on dates the Government notifies. We could not find a separate commencement notification, but the rules implementing the lump sum are in force and the PSDT portal offers Form 17 for download, so the option is operating in practice. Since the opt-in deadline is 31 March, 2026-27 is the first full year in which a lump-sum payer would have paid by 30 April 2026.

How employers deduct and deposit

Section 5 makes every employer deduct the tax from the salary of each liable employee before paying it, and makes the employer liable whether or not it actually deducted. The 2021 amendment rules changed the deduction from quarterly to every month, and added rule 14(3): the tax due for a month is deposited by the last day of the following month. April's deductions are due by 31 May, and so on.

The department's FAQ tells employers to deduct "on the similar pattern of TDS": deduct from employees whose taxable income exceeded the threshold in the previous year, or whose income-tax TDS is being deducted monthly in the current year. If an employee who was below the limit last year crosses it this year, the employer should, in light of the Form 16 position, deduct the PSDT due from February or March salary and deposit it. For government staff, rule 12(3) requires the drawing and disbursing officer to attach a statement to February salaries and not to draw February pay until any missed tax is deducted.

Two employers. Rule 3(9) and Form PSDT-5 let someone who works for more than one employer either enrol and pay the tax himself, or nominate one employer to deduct it and inform the others and the designated officer. Either way, PSDT is charged only once.

Records. Rule 13 requires a register showing salary paid to each employee and the PSDT deducted. Payment must go directly into the treasury or an authorised bank by challan in Form PSDT-8; the designated officer's office cannot accept payments.

PSDT for an employer, month by month

Step 1

Check each employee's taxable income

Step 2

Above exemption limit?

old or new regime

Step 3

Deduct ₹200 from salary

every month

Step 4

Deposit by month-end

following month, Form PSDT-8

Step 5

February check

catch up on late-year liability

Step 6

Annual return PSDT-6

by 31 August

Registration and enrolment on the PSDT portal

Section 6 requires every employer liable to pay tax to get a certificate of registration, and every other person liable to pay — a trader, professional, firm or company paying for itself — to get a certificate of enrolment. A business that started after the Act came into force has thirty days from starting to apply. Since the 2025 amendment, a person already registered as an employer does not need a separate enrolment: it discloses its own liability and its employer liability on the same registration.

The steps under rule 3, as amended:

1. Apply on psdt.punjab.gov.in in Form PSDT-1 (employer) or Form PSDT-2 (person). Your PAN or TAN becomes your username, and the form now asks for your GSTIN if you have one.
2. Where you have more than one place of work in Punjab, make one application naming a principal place of work and listing the others.
3. A temporary registration number is issued straight away.
4. The designated officer grants the permanent certificate — Form PSDT-3 for employers, PSDT-4 for enrolment. The 2025 rules ask the officer to do this within seven days of an application in order, and a 2025 department SOP says an application not processed within 14 working days is approved on a deemed basis.
5. Display the certificate, or a copy, at your place of work (rule 7).

Your enrolment certificate states the tax payable and the date by which to pay it, and it counts as a notice of demand. If your business closes or your liability ends, intimate the designated officer within thirty days (now in Form PSDT-15); cancellation is issued in Form PSDT-16. A duplicate certificate costs ₹50. The portal lists a helpline (0175-2225192 and 0175-2300419) and a helpdesk e-mail.

Getting compliant with PSDT

1. 1

   Work out who is liable

   List employees whose taxable income exceeds the exemption limit, and check your own business income — and each branch.

2. 2

   Register or enrol

   Form PSDT-1 (employer) or PSDT-2 (own liability) on psdt.punjab.gov.in, using your PAN or TAN, within 30 days of starting.

   PSDT portal
3. 3

   Decide monthly or lump sum

   To pay ₹2,200 a year once instead of ₹200 a month, file Form PSDT-17 by 31 March.

4. 4

   Deduct and deposit

   Deduct ₹200 a month and deposit by the last day of the following month on Form PSDT-8 — or pay the lump sum by 30 April.

5. 5

   File the annual return

   PSDT-6 (employers) or PSDT-7 (enrolled persons) with challan copies by 31 August.

Due dates and returns

Section 7 requires both employers and enrolled persons to self-assess and file an annual return, accompanied by proof of full payment — a return without it is not treated as filed. Employers file Form PSDT-6 showing salaries paid and tax deducted; enrolled persons file Form PSDT-7 showing annual gross income and tax paid.

The return date has moved twice, and many websites have not caught up. The 2018 rules set 30 April for employers. The 2021 amendment set 30 April for enrolled persons too, and let the Government extend the date. Then the PSDT (First Amendment) Rules, 2022, published on 7 February 2022, replaced "thirtieth day of April" with "thirty-first day of August" in both rule 10 and rule 11. The department's older calendar PDF and its 2021 FAQ still say 30 April. We follow the amended rule — 31 August — but filing early does no harm.

Punjab State Development Tax calendar

Within 30 days of starting

Apply for registration (PSDT-1) or enrolment (PSDT-2)

31 March

Last day to opt in (PSDT-17) or out (PSDT-18) of the lump sum for the coming year

30 April

Lump-sum payers pay ₹2,200 a year for the year

Every month

Deduct ₹200; deposit by the last day of the following month

February / March

Catch-up deductions for employees who crossed the limit during the year

31 August

Annual returns PSDT-6 (employers) and PSDT-7 (enrolled persons) for the previous year

An enrolled person paying monthly-equivalent tax under section 10(3) pays each year's tax, as stated in the enrolment certificate, within one month from the end of the month of enrolment. A revised return is allowed before an assessment notice or within three months of the year end, whichever is earlier.

Worked examples in ₹

Example 1 — a salaried accountant in Mohali. Harpreet earns ₹65,000 a month (₹7,80,000 a year) under the old regime, with ₹2,00,000 of deductions. Her taxable income of ₹5,80,000 is above ₹2.5 lakh, so her employer deducts ₹200 a month every month — ₹2,400 a year for the year — and deposits April's ₹200 by 31 May.

Example 2 — a factory worker below the limit. Gurdeep earns ₹22,000 a month, ₹2,64,000 a year. After the standard deduction his taxable income is well under the exemption limit under either regime, so no PSDT is deducted, even though most other states would charge him professional tax at that salary.

Example 3 — a Ludhiana hosiery unit with 80 staff. Sixty-two machine operators earn below the limit. Eighteen supervisors, accountants and managers are income-tax payers. Monthly deduction: 18 × ₹200 = ₹3,600, deposited by the end of the next month; the year's total is ₹43,200. The company is also a "person": it pays ₹2,400 a year for itself, or ₹2,200 a year if it opted in by 31 March and paid by 30 April. A branch warehouse in Jalandhar is a separate person with its own liability.

Example 4 — a doctor in Patiala. Dr Kaur's clinic income gives her taxable income of ₹18 lakh. She enrols in Form PSDT-2, opts for the lump sum on PSDT-17 before 31 March, and pays ₹2,200 a year by 30 April — ₹200 less than monthly. Her two receptionists on ₹15,000 a month are below the limit, so she does not need an employer registration for them.

Example 5 — a partnership firm. A two-partner trading firm in Amritsar has taxable income of ₹12 lakh; each partner's share of profit gives them taxable income above the limit. The firm and both partners are separate persons, so the combined liability is 3 × ₹2,400 = ₹7,200 a year on monthly basis.

Our free salary slip generator can show the ₹200 PSDT deduction as its own line, and the TDS calculator helps you see which employees are above the income-tax limit.

Penalties, interest and recovery

• Interest (section 11): simple interest at 2% a month (or part of a month) on tax not deducted, not deposited or not paid. ₹3,600 paid four months late carries ₹288.
• Late registration (section 19, as substituted in 2025): ₹2,000 for each year of delay for an employer, ₹1,000 for each year of delay for a person liable to enrol. A part of a year counts as a full year. Before 2025 this was ₹50 a day.
• Late returns: ₹1,000 per return per year for an employer, ₹500 per return per year for an enrolled person.
• False information: ₹2,000 (employer) or ₹1,000 (person), or the extra tax, interest and penalty it caused, whichever is higher.
• Not paying a demand: a penalty equal to 50% of the tax due.
• General non-compliance: ₹2,000 for an employer (up to ₹3,000 if it continues) and ₹1,000 for a person (up to ₹2,000).
• Recovery: arrears are recoverable as arrears of land revenue using the recovery powers of the Punjab VAT law. The 2025 amendment also makes legal heirs, successors, partners of a dissolved firm and directors of a private company in liquidation liable for unpaid PSDT, and lets the Government notify a settlement scheme for old dues.
• Assessment and appeals: assessments can be made within three years of the return date; appeals lie within 60 days and need 50% of the amount paid first.

Common mistakes and how to fix them

Applying a salary slab. Payroll software set up for other states often looks for a monthly salary threshold. Punjab has none — the test is whether the employee is an income-tax payer. Map PSDT to the income-tax computation instead.

Treating Punjab as a "no PT" state. Some multi-state employers, reading old lists, never registered in Punjab. Because the employer is liable whether or not it deducted, the department can assess the tax plus 2% a month interest for every year since 2018, within the time limits. If you find a gap, register now, pay the arrears with interest and file the missing returns before a notice arrives.

Using the 30 April return date. It was replaced by 31 August in 2022. Filing on 30 April is safe; assuming a late fee is due after 30 April is not.

Forgetting the company's own liability. A company, LLP or firm that is itself an income-tax payer owes ₹2,400 a year a year for each branch, in addition to staff deductions.

Opting into the lump sum late. PSDT-17 must be filed before the year starts. An opt-in filed in April applies only from the following year, so pay monthly for the current one.

Senior citizens assumed exempt. The Act's reference to senior citizens only gives them the higher income-tax exemption limit. A retired professional with taxable income above ₹3 lakh (old regime) is liable.

Punjab State Development Tax checklist

0/7

• Register (PSDT-1) or enrol (PSDT-2) on psdt.punjab.gov.in within 30 days of starting
• Identify employees whose taxable income exceeds the exemption limit
• Deduct ₹200 a month and deposit by the last day of the following month
• Decide on the ₹2,200 a year lump sum and file PSDT-17 by 31 March
• Pay your own tax as a person — for each branch
• Run a February check for staff who crossed the limit mid-year
• File PSDT-6 or PSDT-7 with challans by 31 August

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Staff in other states and income-tax treatment

Professional tax follows the place of work, so a Ludhiana company with a sales office in Gurugram deducts nothing there (Haryana has no professional tax), while staff in Kolkata follow West Bengal's revised slabs and staff in Ranchi follow Jharkhand's annual slabs. Our professional tax due dates table puts every state side by side, and the state-wise professional tax guide explains the common rules.

For income tax, PSDT deducted from salary is professional tax, so employees can claim it as a deduction from salary income only under the old regime. A business can claim its own PSDT as an expense. If you pay advance tax as a professional, see our advance tax guide for the instalment dates.

Official links

• Punjab State Development Tax portalRegistration, payment, Form 17 and helpline
• PSDT Act, 2018 (Punjab Gazette)
• 2025 Amendment Act and First Amendment Rules (lump sum)
• PSDT Rules — 2022 amendment (31 August returns)
• Department FAQ on PSDT

What to do next

Check whether you, each branch and each income-tax-paying employee are covered, register on the PSDT portal if you have not, and put the month-end deposit date and the 31 August return in your payroll calendar. Before 31 March each year, decide whether the ₹2,200 lump sum suits your own enrolment. Setting salaries for the year? Check the Punjab minimum wages first.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

Is there professional tax in Punjab?

Yes, under another name. Punjab levies the Punjab State Development Tax (PSDT) under the Punjab State Development Tax Act, 2018. Legally it is a tax on professions, trades, callings and employments under Article 276. The rate is ₹200 a month for salaried people and for people with business or professional income, but only if they pay income tax.

Who has to pay ₹200 a month in Punjab?

Anyone working, trading or practising in Punjab whose taxable income exceeds the basic exemption limit under income-tax law. The department's FAQ explains that taxable income is worked out after all permitted deductions. Casual wage earners and farmers who sell only their own produce are outside the Act. Someone whose taxable income is below the exemption limit pays nothing.

What is the ₹2,200 lump-sum option for Punjab development tax?

The Punjab State Development Tax (Amendment) Act, 2025 added a third Schedule entry: ₹2,200 a year paid once instead of ₹200 a month. You opt in on Form PSDT-17 by 31 March before the financial year starts, and you pay by 30 April. Form PSDT-18 takes you back to monthly payment.

What is the due date for PSDT in Punjab?

Employers deposit each month's deductions by the last day of the following month, so September's tax is due by 31 October. The annual return (PSDT-6 for employers, PSDT-7 for enrolled persons) is due by 31 August, after a 2022 amendment moved it from 30 April. Lump-sum payers pay by 30 April.

Do pensioners and senior citizens pay Punjab State Development Tax?

Senior citizens are not automatically exempt. The department's FAQ says they pay if their taxable income exceeds the higher exemption limit for their age group. Pension is taxed under the head 'Salaries', and the Finance Department has written to treasuries on deducting ₹200 from pensions. Pensioners below the exemption limit pay nothing.

What is the penalty for not paying PSDT on time?

Unpaid tax carries simple interest of 2% a month under section 11. Since the 2025 amendment, late registration costs an employer ₹2,000 for each year of delay, and a late employer return costs ₹1,000 per return per year. Ignoring a demand notice can add a penalty of 50% of the tax due. Arrears are recoverable as land revenue.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 12 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Punjab State Development Tax Act, 2018 (Punjab Act 11 of 2018) — Punjab Gazette Extraordinary, 19 April 2018 — Department of Excise and Taxation, Government of Punjab · accessed 12 October 2026
2. 2.Punjab State Development Tax (Amendment) Act, 2025 (Punjab Act 10 of 2025) and PSDT (First Amendment) Rules, 2025 — Punjab Gazette, 9 August 2025 and 7 November 2025 — Department of Excise and Taxation, Government of Punjab (PSDT portal) · accessed 12 October 2026
3. 3.Punjab State Development Tax Rules, 2018 (G.S.R.71, Punjab Gazette 20 September 2018) — Department of Excise and Taxation, Government of Punjab · accessed 12 October 2026
4. 4.PSDT (Amendment) Rules, 2021 and PSDT (First Amendment) Rules, 2022 — Department of Excise and Taxation, Government of Punjab (PSDT portal) · accessed 12 October 2026
5. 5.Frequently Asked Questions — The Punjab State Development Tax Act, 2018 — Department of Excise and Taxation, Government of Punjab · accessed 12 October 2026
6. 6.Clarification regarding threshold limits under the Income Tax Act for levying PSDT (letter of 13.12.2024) and Finance Department clarification of 24.07.2020 — Department of Excise and Taxation, Government of Punjab · accessed 12 October 2026
7. 7.Punjab State Development Tax Portal — Department of Excise and Taxation, Government of Punjab · accessed 12 October 2026
8. 8.PIB — No income tax on annual income up to ₹12 lakh under new tax regime (Union Budget 2025-26) — Press Information Bureau, Government of India · accessed 12 October 2026
9. 9.Punjab Assembly passes State Development Tax amendment (July 2025 report) — The Tribune · accessed 12 October 2026