Your Company Is in Delhi, Your Employee Works in Mumbai: Do You Owe Professional Tax?

You've registered your company in Delhi. Delhi doesn't levy Professional Tax, so you've filed it away as one less thing to track. Then you hire someone who works out of Mumbai, and a question you thought you'd already answered comes back.

The rule, in one line

Professional Tax follows the employee's place of work. The Karnataka Act defines it plainly: the place a person or employer ordinarily carries on their profession, trade or employment. Incorporation state, registered office, and HQ address don't enter into it. This is the opposite of how most founders reason about their company, because for company law, tax residency and most other compliance questions, incorporation state genuinely is the anchor. Professional Tax breaks that pattern.

The Delhi-to-Mumbai walkthrough

Your company is incorporated in Delhi. You hire one employee who works from an office, or from home, in Mumbai. Delhi's non-levy status is irrelevant to that hire. What matters is that Maharashtra levies PT, and this employee's work location is Maharashtra. You now need a PTRC registration with the Maharashtra state tax department, so you can legally deduct PT from that employee's salary and remit it. Your company's Delhi registration stays exactly as it was. This new Maharashtra filing sits alongside it as an additional obligation.

Why founders get this wrong

Founders pick an incorporation state for real reasons: lower stamp duty, an address that's easy to manage, a registered agent already in place. Then they extend that same logic to every other compliance question, assuming the state they chose governs everything downstream. It doesn't. Professional Tax is levied on the person doing the work, at the place they do it. Your company's home state has no bearing on an employee working somewhere else.

What happens as you scale

Hire in three PT-levying states and you register in three PT-levying states. There's no bundled national registration and no home-state exemption that covers employees elsewhere. Each state runs its own portal, its own forms, its own due dates, and its own slab. A company with employees in Maharashtra, Karnataka and West Bengal ends up filing three separate PTRC returns, on three separate schedules.