A US tech company hiring engineers in Bengaluru, Hyderabad and Mumbai discovers quickly that PT isn't one tax but three. Karnataka's slabs differ from Maharashtra's, the filing dates differ, the portals differ, and the penalties differ. None of the amounts are large, but the administrative drag — and the cumulative late-fee exposure if you miss filings — adds up.
What PT actually is
PT is a state-imposed tax on income from employment, capped by the Constitution at ₹2,500 per person per year. The deduction is small in rupee terms — typically ₹200/month for higher salary bands in most states. The constraint isn't the amount; it's the compliance machinery.
Two registrations per state
- Employer Registration — one per state where you have employees. Identifies your subsidiary as a PT-deducting entity in that state.
- Enrolment Certificate — covers individual professionals / directors in some states. Required separately, with its own annual fee.
The key states for foreign-owned subsidiaries
| State | Top monthly slab | Filing frequency | Foreign-employer specifics |
|---|---|---|---|
| Karnataka | ₹200 (above ~₹15k salary) | Monthly | Bengaluru is the densest tech hub — most foreign employers register here first. Strict on monthly filing. |
| Maharashtra | ₹200-300 across slabs | Monthly + annual return | Mumbai / Pune. Two-track filing — monthly + annual reconciliation. |
| Telangana | ₹200 (above ~₹20k) | Monthly | Hyderabad. Slabs mirror Andhra. Fast penalty issuance. |
| Tamil Nadu | Variable by municipality | Half-yearly | Chennai. Administered by local municipal body (Chennai Municipal Corp etc.), not the state. Adds complexity. |
| West Bengal | ₹200 (above ~₹40k) | Monthly | Kolkata. e-payment only. |
| Gujarat | ₹200 (above ~₹12k) | Monthly | Ahmedabad. Slabs different at higher bands. |
| Kerala | Variable | Half-yearly | Kochi etc. Filed with the panchayat or municipality. |
| No PT | — | — | Delhi NCR, Haryana, UP, Rajasthan, Punjab — no PT applies. |
Multi-state PT calendar owned by your consultant
FastLegal's consultant maintains your state-wise PT registration map and runs each filing on the schedule each state expects — monthly, half-yearly, annual — across all the states your team sits in. Late-fee notices stop arriving. You receive one reconciliation per quarter showing PT remitted by state.
Mistakes specific to multi-state foreign employers
- Registering only in the headquarters state. If your subsidiary is registered in Karnataka but you have one engineer in Mumbai, Maharashtra still expects you to register and deduct PT there. The state of the establishment under whose books the employee is paid usually drives jurisdiction, but state-of-work claims are becoming more common.
- Treating a remote employee as 'their home state' employee when they're paid from the Bengaluru office. Verify with state regulations — particularly Karnataka, where remote-worker PT is usually applied at the Bengaluru rate.
- Forgetting that Tamil Nadu's PT is municipality-level, not state-level. A company with an office in Chennai files with the Greater Chennai Corporation; an office in Coimbatore files with the Coimbatore Municipal Corporation. Separate registrations.
- Skipping Maharashtra's annual return — Maharashtra requires both monthly remittance and an annual return reconciling the year's deductions. Many foreign-owned subsidiaries discover the annual return only when the show-cause arrives.
What your Indian employees see
On the payslip, PT is a small line item under deductions — usually ₹200/month. It's deductible under Section 16(iii) of the Income Tax Act when computing taxable salary, so it reduces the employee's income tax base. The new tax regime allows PT deduction; the old regime allows it too.
Indian employees rarely ask about PT — but they do notice if PT is wrong (a Mumbai employee seeing the Karnataka rate on their payslip raises an eyebrow). Get the state assignment right at onboarding.
Frequently asked questions
If our engineer works from home in a different state from the office, which state's PT applies?+
Currently the state of the establishment from which the employee is paid (usually your registered office) drives jurisdiction. If you have a fully remote team across multiple states with meaningful headcount, plan to register in each material state — enforcement is moving toward state-of-work rules.
Is PT deductible from the employee's tax base?+
Yes — Section 16(iii) allows PT actually paid by the employee as a deduction from gross salary when computing taxable income. Applies to both old and new tax regimes.
Do we need to file PT for our directors?+
Yes — directors drawing salary are employees for PT purposes. Some states (Karnataka, Maharashtra) also require enrolment-certificate-level PT for the company itself, separate from employee PT.
Does FastLegal file PT for all our states?+
Yes — multi-state PT is built into our Payroll plan. We maintain the registration list, file on each state's schedule, and reconcile centrally. One dashboard, one consultant.
Stop reading circulars. Start running clean payroll.
Every FastLegal plan ships with a dedicated payroll consultant — a real human who runs your PF, ESI, PT, TDS and Form 16 issuance, configured to your salary structure, your state, and your hiring plan. You sign off. We do the rest.