Professional Tax in Bihar: Slab Rates, Registration, Payment, Exemptions, and Compliance Guide for 2026

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Professional Tax in Bihar is a state-level tax on every individual earning income through employment, profession, trade, or business within the state. Unlike states like Maharashtra or Karnataka where PT is assessed on monthly salary, Bihar determines PT based on annual income and collects it annually by November 15.

The tax is governed by the Bihar State Tax on Professions, Trades, Callings and Employment Act, 2011. The Act authorizes the state government to levy PT on salaried employees, self-employed professionals, dealers, and business establishments operating in Bihar.

This guide covers the current slab rates for both salaried individuals and dealers, employer obligations, registration process, payment procedure, exemptions, penalties, and how Bihar PT compares to neighbouring states.

What Is Professional Tax in Bihar?

Professional Tax (PT) is a direct tax levied by the Government of Bihar on individuals and entities earning income within the state. The legal framework is the Bihar State Tax on Professions, Trades, Callings and Employment Act, 2011 and the accompanying Bihar Professional Tax Rules.

The tax applies to salaried employees, self-employed professionals (doctors, CAs, lawyers, architects, consultants), freelancers, companies, factories, partnership firms, LLPs, sole proprietors, dealers with turnover above Rs 10 lakh, and commission agents.

Constitutional Cap

Under Article 276(2) of the Constitution of India, no state can levy Professional Tax exceeding Rs 2,500 per person per year. Bihar's maximum annual PT matches this ceiling exactly.

Who Must Pay Professional Tax in Bihar?

Professional Tax in Bihar applies to anyone earning income from employment, profession, trade, or business within the state. Bihar has two separate slab structures: one for salaried individuals and professionals, and another for dealers and businesses based on turnover.

Employers with salaried staff in Bihar must:

1. Obtain a Certificate of Registration from the PT Assessing Authority
2. Determine each employee's annual salary and identify the applicable slab
3. Deduct PT from employee salaries (monthly deduction is permitted as an administrative convenience)
4. Deposit the collected amount by November 15 of the assessment year

Self-employed professionals must:

1. Register with the PT Assessing Authority
2. Pay PT annually based on their income slab
3. Submit returns as prescribed under the Rules

Dealers and businesses with turnover above Rs 10 lakh must register with the PT Assessing Authority, pay PT annually based on the turnover slab, and file returns by the prescribed deadline.

Salary computation for PT: The annual gross income, including basic pay, dearness allowance, special allowance, bonus, and other taxable components, determines the applicable slab.

Location rule: PT follows the employee's work location, not the employer's registered address. If your company is headquartered in Delhi but employees work from Patna, you need PT registration in Bihar. For managing PT across multiple states, see our state-wise Professional Tax guide.

Bihar Professional Tax Slab Rates 2026

Bihar uses annual income to determine the applicable PT slab. Unlike most states that define monthly slabs, Bihar's PT Act specifies annual slabs with annual tax amounts. The rates below are applicable for FY 2026-27.

Salaried Individuals and Professionals

Tax Rate Chart

Professional Tax Slabs: Salaried Individuals in Bihar

Annual tax based on annual gross income. Applicable for FY 2026-27.

Annual income up to Rs 3,00,000

No Professional Tax payable

Nil

Rs 3,00,001 to Rs 5,00,000

Approximately Rs 83 per month

Rs 1,000/year

Rs 5,00,001 to Rs 10,00,000

Approximately Rs 167 per month

Rs 2,000/year

Above Rs 10,00,000

Constitutional cap under Article 276(2)

Rs 2,500/year

Key points:

• Bihar has one of the highest exemption thresholds in India at Rs 3,00,000 per year. Compare this to Madhya Pradesh (Rs 2,25,000) or Maharashtra (Rs 7,500 per month, approximately Rs 90,000 per year)
• The Act specifies annual tax amounts, not monthly. Employers who deduct monthly do so as an administrative convenience
• For employees earning Rs 25,000 per month (Rs 3,00,000 per year), no PT is payable. An employee earning Rs 25,001 per month (Rs 3,00,012 per year) falls in the Rs 1,000 slab
• The jump from Rs 2,000 to Rs 2,500 occurs at Rs 10 lakh annual income, making the top slab relevant primarily for mid-to-senior-level employees

Monthly Deduction Equivalents (If Employer Deducts Monthly)

While Bihar's PT is assessed annually, employers may choose to deduct monthly for payroll convenience. Here are the approximate monthly amounts:

Note: The 12th-month adjustment ensures the annual total matches the statutory amount exactly. Since the Act prescribes annual amounts, employers can also deduct in a single lump sum or in any periodic pattern, as long as the full amount is deposited by November 15.

Dealer and Business Turnover-Based Slabs

Bihar also levies PT on dealers and businesses based on annual turnover. This is separate from the salary-based slab and applies to registered dealers, traders, and business establishments.

Tax Rate Chart

Professional Tax Slabs: Dealers and Businesses in Bihar

Annual tax based on annual turnover. Applicable for FY 2026-27.

Turnover up to Rs 10 lakh

No Professional Tax payable

Nil

Rs 10 lakh to Rs 20 lakh

Small businesses

Rs 1,000/year

Rs 20 lakh to Rs 40 lakh

Medium businesses

Rs 2,000/year

Above Rs 40 lakh

Constitutional cap

Rs 2,500/year

Key points:

• The turnover-based slabs mirror the salary slabs in structure, with four tiers and the same Rs 2,500 cap
• Turnover below Rs 10 lakh is exempt, which covers most micro-enterprises
• A dealer with turnover of Rs 35 lakh pays Rs 2,000 per year, while one with Rs 45 lakh turnover pays Rs 2,500
• These slabs apply per establishment. A business with multiple branches in Bihar may need separate registrations

How to Register for Professional Tax in Bihar

Professional Tax registration in Bihar is managed by the PT Assessing Authority under the Commercial Tax Department.

Employer Registration (Certificate of Registration)

1. Visit the office or portal: Contact the Bihar State Tax department or visit biharstax.gov.in
2. Select registration type: Apply for PT Employer Registration (Certificate of Registration)
3. Fill in details: Enter business information, registered address, contact details, PAN, and employee count
4. Submit documents: Provide the required identity, address, and business proof documents
5. Receive Certificate: Upon verification, the Certificate of Registration is issued, authorizing the employer to deduct and remit PT

Self-Employed and Dealer Registration

Self-employed professionals and dealers follow the same process: apply to the PT Assessing Authority with personal or business details, PAN, profession or trade type, and annual income or turnover estimate. Submit identity and address proof to receive the registration certificate.

Documents Required

• PAN card of the business or professional
• Certificate of incorporation or registration (for companies, LLPs, partnerships)
• Address proof of the registered office (utility bill, rent agreement, or property deed)
• Identity proof of proprietor, partners, or directors
• List of employees with salary details (for employer registration)
• Bank account details

Employers must register promptly after hiring staff or commencing business in Bihar. Delay in registration attracts penalties under the Act.

Payment Process and Due Date

Bihar's PT payment follows an annual cycle, with the statutory due date of November 15.

Payment Steps

1. Calculate the applicable tax based on each employee's annual salary slab or the business's turnover slab
2. Visit biharstax.gov.in and log in with registration credentials
3. Select Professional Tax payment from the tax payment section
4. Enter details: Specify the assessment year, employee count (if employer), and total PT payable
5. Choose payment method: Net banking or debit card
6. Complete payment and download the challan receipt

Payment Schedule

Important: Unlike states like Maharashtra or Madhya Pradesh where employers must deposit monthly (by the 10th or last day of the following month), Bihar requires a single annual payment by November 15. This simplifies compliance significantly for employers with staff only in Bihar. However, employers operating in multiple states must track Bihar's annual cycle alongside monthly cycles in other states.

Penalties for Non-Compliance

Bihar imposes penalties for late payment, non-registration, and continued default.

Tax Rate Chart

Penalties for Professional Tax Non-Compliance in Bihar

Penalties under the Bihar State Tax on Professions, Trades, Callings and Employment Act, 2011.

Late payment penalty

Per month of delay

Rs 100/month

Maximum fine

Upper limit on fine for default

Rs 500

Continued default

After fine, per day of continued non-payment

Rs 10/day

Penalty Calculation Example

If an employer owes Rs 2,500 in PT (for employees in the highest slab) and pays 4 months late:

• Late payment penalty: Rs 100 x 4 months = Rs 400
• Fine (if imposed): Up to Rs 500
• Total payable: Rs 2,500 + Rs 400 = Rs 2,900 (without fine), or up to Rs 3,400 (with maximum fine)

If default continues beyond the fine:

• Additional charge: Rs 10 per day
• For 30 days of continued default: Rs 10 x 30 = Rs 300
• This per-day charge accumulates until the tax is paid

Compared to other states: Bihar's penalty structure (Rs 100/month flat) is simpler than states like Madhya Pradesh (2% per month on outstanding amount) or Gujarat (18% per annum). The flat Rs 100 per month means the penalty burden is proportionally heavier for lower-slab taxpayers.

Exemptions from Professional Tax in Bihar

The following categories are exempt from Professional Tax in Bihar:

• Persons with disabilities as defined under applicable disability legislation
• Members of the armed forces (Army, Navy, Air Force)
• Senior citizens aged 65 years and above
• Salaried individuals earning up to Rs 3,00,000 per year (below the taxable threshold)
• Dealers and businesses with turnover up to Rs 10 lakh (below the turnover threshold)

The state government has the power to exempt additional categories by notification under the Act.

Verify exemption eligibility with the Bihar Commercial Tax Department. Exemption categories may be updated by state notification.

Income Tax Deduction Under Section 16(iii)

Professional Tax paid during the financial year qualifies for deduction under Section 16(iii) of the Income Tax Act, 1961. This applies to salaried employees whose employer deducts PT from their salary.

How it works:

• The PT amount deducted from salary is allowed as a deduction from gross salary while computing taxable income under the head "Salaries"
• This deduction is available under both the old and new tax regimes
• The maximum deductible amount for Bihar employees is Rs 2,500 per year (the highest slab)

For self-employed individuals: PT paid can be claimed as a business expenditure under Section 37(1), reducing income under the head "Profits and Gains of Business or Profession."

For a detailed breakdown of salary tax deductions including standard deduction and PT, see our guide on Section 16 deductions for salaried employees.

Bihar vs Jharkhand vs West Bengal: Key Differences

If your business operates across eastern Indian states, you need separate PT registrations in each state.

Critical for multi-state employers: Bihar's annual payment cycle is unusual. Payroll teams accustomed to monthly PT deposits in other states must track the November 15 deadline separately.

Common Mistakes to Avoid

1. Treating Bihar PT as monthly when it is annual

Bihar assesses PT on annual income with an annual payment deadline (November 15). While employers may deduct monthly from salaries for convenience, the statutory obligation is annual. Do not confuse this with states like Maharashtra or Karnataka that mandate monthly deposits.

2. Using monthly salary instead of annual income for slab determination

Bihar's slabs are defined by annual income. An employee earning Rs 24,000 per month (Rs 2,88,000 per year) is exempt because annual income is below Rs 3,00,000. An employee earning Rs 26,000 per month (Rs 3,12,000 per year) falls in the Rs 1,000 slab. Always calculate the annual figure first.

3. Missing the November 15 deadline

Unlike the monthly 10th-of-the-month deadlines in many states, Bihar has a single annual deadline. It is easy to overlook since it falls mid-month in November. The Rs 100 per month penalty starts immediately after November 15.

4. Not registering dealer or business separately

If you are both an employer and a dealer in Bihar, employee PT (salary-based) and business PT (turnover-based) are separate obligations. You may owe under both slabs.

5. Ignoring the turnover-based slab for small businesses

Businesses with turnover above Rs 10 lakh must register and pay PT even without employees. Many sole proprietors overlook this until they receive a notice.

Where Tax Garden Helps

Professional Tax compliance in Bihar involves employer registration, correct slab identification, timely annual deposits, and coordination with other payroll obligations like PF and ESI.

Tax Garden handles end-to-end Professional Tax compliance in Bihar:

• Registration: Application for Certificate of Registration with the PT Assessing Authority, including document preparation and submission
• Payroll integration: Correct slab-based PT deduction configured in your payroll system, with annual or monthly deduction options
• Annual deposit: Timely payment by the November 15 deadline
• Multi-state coordination: If you have employees across states, we manage PT registration and compliance in every applicable state, handling Bihar's annual cycle alongside monthly cycles in other states
• Penalty resolution: Handling notices and penalty assessments from the Commercial Tax Department

For outsourced payroll management that includes PT compliance, see our payroll outsourcing guide.

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Sources: Bihar State Tax on Professions, Trades, Callings and Employment Act, 2011 (biharstax.gov.in); Constitution of India, Article 276(2); Income Tax Act, 1961, Section 16(iii) and Section 37(1); Bihar Commercial Tax Department Portal. Slab rates confirmed via factohr.com, greythr.com, cleartax.in, godigit.com, simpliance.in, saral.pro. Penalty provisions (Rs 100 per month, Rs 500 max fine, Rs 10 per day continued default) confirmed via factohr.com, godigit.com, indiafilings.com. Exemption categories confirmed via factohr.com, godigit.com. Slab rates, thresholds, and penalty provisions are subject to amendment by state notification. Verify current rates and procedures with the Bihar Commercial Tax Department before implementing deductions or filings. This article provides general information and is not a substitute for professional advice specific to your business circumstances.

Frequently Asked Questions

What is the Professional Tax exemption threshold in Bihar?

Individuals earning an annual income of up to Rs 3,00,000 are fully exempt from Professional Tax in Bihar. The first taxable slab starts at Rs 3,00,001 per year, where the annual tax is Rs 1,000. Similarly, dealers and businesses with annual turnover up to Rs 10 lakh are exempt.

What is the maximum Professional Tax payable per year in Bihar?

The maximum annual Professional Tax in Bihar is Rs 2,500. This applies to salaried individuals earning above Rs 10,00,000 per year and dealers with turnover above Rs 40 lakh. This is the constitutional ceiling under Article 276(2) of the Constitution of India. No state can levy PT exceeding this amount.

When must employers deposit Professional Tax in Bihar?

The annual due date for Professional Tax payment in Bihar is November 15 of the assessment year. The Bihar PT Act assesses tax on an annual basis. Employers may deduct PT from employee salaries monthly as an administrative convenience, but the statutory obligation is annual payment by November 15.

How do I pay Professional Tax online in Bihar?

Professional Tax in Bihar can be paid through the Bihar State Tax website at biharstax.gov.in. Log in with your registration credentials, select Professional Tax from the tax payment section, enter the applicable tax amount and assessment period, and complete payment via net banking or debit card. Download the challan receipt for your records.

What is the penalty for late Professional Tax payment in Bihar?

Late payment of Professional Tax in Bihar attracts a penalty of Rs 100 per month of delay. Additionally, a maximum fine of Rs 500 may be imposed. For continued default beyond the fine, Rs 10 per day is charged. These penalties are cumulative, so early payment avoids significant additional costs.

Who is exempt from Professional Tax in Bihar?

Persons with disabilities, members of the armed forces (Army, Navy, Air Force), and senior citizens aged 65 years and above are exempt from Professional Tax in Bihar. Additionally, individuals earning below Rs 3,00,000 per year and dealers with turnover below Rs 10 lakh are below the taxable threshold.

Can Professional Tax paid in Bihar be claimed as an income tax deduction?

Only under the old tax regime. A salaried employee in Bihar can deduct Professional Tax actually paid during the year from salary income under Section 16(iii) of the Income Tax Act, 1961, up to Rs 2,500. The new regime, the default for AY 2026-27, does not allow this deduction, only the Rs 75,000 standard deduction. Self-employed persons can claim PT paid as a business expense in either regime.