Navigating PT Eligibility for Remote Employees in Non-Eligible States: How Do You Manage This?

We are a new Pvt Ltd company, and a majority of our employees are working remotely. We have only one branch in Odisha. We have registered for PT but wanted to check if our employees are based out of a state where PT is not eligible, like Chhattisgarh. How should we handle this scenario?

Please share some government documents citing this case.

Professional tax for remote employees

Professional tax applies to people working in a particular state, essentially in a specific office. If you have employees working remotely, then professional tax is not payable for them in the location where your headquarters is situated.

You may be required to pay their professional tax in the state where they are actually working. However, the legislation was not crafted with work from home (WFH) in mind, making this area uncharted territory. It may not be possible to register for professional tax in a state where you do not maintain an office, so it is essential to review the definitions and provisions outlined in the relevant state laws to determine the appropriate course of action.

So, do you suggest skipping PT for them, or is there any other portal where we can raise the concern? My CA is also not sure how to handle this.

Professional Tax Applicability

For those in states where there is no PT applicable, you definitely don't need to pay it.

State-Specific PT Acts

For others, the matter has not been tested yet by courts. So, read the PT acts of each state and then decide.

Yes, your CA will not have the answer to this...

For those in states where there is no PT applicable, you definitely don't need to pay it. Hopefully, this will not create any issues as per the law.

Professional Tax Deduction Responsibility

No deduction towards PT needs to be made where the state where they are employed does not fasten the responsibility on the employer.

To my knowledge, this situation arises not because there is no PT, but because the system of the local body (Municipal Corporation/Municipality/Panchayat) collects the tax directly from the employee concerned. Kerala and, perhaps, Tamil Nadu follow this pattern.