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Punjab State Development Tax (PSDT)

In Punjab, professional tax is levied in the form of the Punjab State Development Tax under The Punjab State Development Tax Act, 2018 and The Punjab State Development Tax Rules, 2018. The enactment is administered statewide by the Department of Excise and Taxation, Government of Punjab.

1. Statutory Applicability & Tax Slabs​

Unlike traditional slab-based states, Punjab links liability under the PSDT directly to whether a person is assessable under the head "Income from Salaries and/or Wages" under the Income Tax Act, 1961:

Income Category / Tax Regime BenchmarkAnnual Taxable IncomeMonthly PSDT (₹)Annual Impact (₹)
Not assessable to Income Tax (Below Basic Exemption)Up to ₹2,50,000 (Old) / ₹3,00,000 (New)NIL₹0
Assessable to Income Tax (Income exceeds basic exemption limit)Above basic taxable limit₹200₹2,400
Link to Income Tax Assessment

Every person who is an income tax payee or earns income taxable under the Income Tax Act (exceeding the statutory basic threshold of ₹2,50,000 under the Old Regime or ₹3,00,000 under the New Regime) is liable to a flat deduction of ₹200 per month (₹2,400 annually).

2. Employer Registration (Form PSDT-8)​

Every employer employing persons liable to PSDT in Punjab must register online:

  • Online Portal: Registrations and filings are processed via the dedicated PSDT Punjab Portal (psdt.punjab.gov.in).
  • Registration Form: Application for employer registration is submitted online in Form PSDT-8.
  • Required Documents:
    1. Memorandum & Articles of Association / Partnership Deed
    2. PAN Card of the company and authorized signatory
    3. Lease / Rent Agreement or registered office premises proof
    4. Employee register detailing taxable salary earners
    5. Bank account details

3. Remittance Schedule & Compliance​

  • Monthly Remittance: PSDT deducted from employees must be paid into the state government account on or before the last day of the month following the month of deduction.
  • Payment Method: Electronic payment through the PSDT online portal via net banking or treasury gateway.

4. Statutory Exemptions​

The following classes are exempt from Punjab State Development Tax:

  1. Persons whose income is not assessable under the Income Tax Act, 1961 (i.e. those falling below the basic income tax exemption limit).
  2. Senior citizens aged 65 years and above not engaged in business or profession.
  3. Members of the Armed Forces of the Union.

5. Official Portal & Reference Links​

❓ Frequently Asked Questions (FAQs)​

1. Is Professional Tax in Punjab called Professional Tax?​

In Punjab, it is formally enacted as the Punjab State Development Tax (PSDT) under Act No. 4 of 2018.

2. Who is liable to pay PSDT in Punjab?​

Any individual whose income from salary, wages, business, or profession is assessable to Income Tax under the Income Tax Act, 1961 is liable to pay ₹200 per month.