What Odisha has abolished
Odisha has stopped levying Professional Tax. Odisha Ordinance 02 of 2026 repeals the Odisha State Tax on Professions, Trades, Callings and Employments Act, 2000, the law under which employers deducted the tax from salaries. The repeal runs from 1 April 2026.
The Governor promulgated the Ordinance while the Legislative Assembly was not in session, using the power in Article 213 of the Constitution. The Law Department published it in an extraordinary issue of the Odisha Gazette on 21 April 2026, three weeks after the date from which it applies.
“(2) This Ordinance shall come into force with effect from dated 1st April, 2026. 2. (1) The Odisha State Tax on Professions, Trades, Callings and Employments Act, 2000 is hereby repealed.”
The decision came with the 2026-27 budget. The Finance Department's fiscal policy statement noted demands for abolition and said the same income was being taxed twice, since income tax is levied separately. It put the revenue the state gives up at about ₹300 crore a year.
An Ordinance, not yet confirmed as an Act
An ordinance has the same force as an Act of the state legislature, but not indefinitely. Under Article 213(2), it must be laid before the Legislative Assembly. It stops operating six weeks after the Assembly reassembles, or sooner if the Assembly disapproves it.
“…shall cease to operate at the expiration of six weeks from the reassembly of the Legislature…”
We have not been able to confirm whether the Odisha Legislative Assembly has passed an Act to replace Ordinance 02 of 2026. This article assumes the repeal from 1 April 2026 still stands, either under the Ordinance or under an Act that replaced it.Needs client review Check the current position before you close a registration or write off a liability.
Arrears and returns for earlier years
The repeal does not wipe the slate clean. Section 2(2) of the Ordinance saves what was done under the old Act and every liability already incurred under it.
“The repeal of the said Act shall not affect, (a) its previous operation or anything duly done or action taken including orders passed, returns submitted, notices issued, assessments made, taxes paid and arrear of tax to be realized…”
Clause (b) saves any right, obligation or liability already accrued. Clause (c) lets an investigation, legal proceeding or remedy be started, continued or enforced as if the Act had not been repealed. Tax that fell due for earlier periods therefore stays due, and the state can still pursue it.
Under the old Act, the employer was liable for the tax on the salaries it paid, whether or not it had deducted it. Tax was paid monthly, by the last day of the following month. The annual return in Form V was due within three months of the end of the year.
The Act allowed each year to be assessed within five years of its end. Unpaid tax carried simple interest of 2% a month and could be recovered as an arrear of land revenue. Read with the savings clause, years up to 2025-26 can still be assessed, and unpaid tax recovered, until those five-year windows close.Needs client review
One case needs a closer look. Section 5 of the old Act made the employer liable when the salary was paid. Where March 2026 salaries were paid on or after 1 April 2026, check with the assessing authority whether tax was due on them.Needs client review
What payroll teams should stop and keep
Stop
- Deducting Professional Tax from Odisha salaries for April 2026 onwards.
- Paying Odisha PT challans for those months.
- Treating any PT deducted from Odisha salaries for April 2026 onwards as tax due: review those amounts and settle them with the employees concerned.Needs client review
Keep
- Paying any tax, interest or penalty still outstanding for March 2026 and earlier.
- Filing the annual Form V return for 2025-26, and any earlier return still pending, since the obligation arose under the old Act.Needs client review
- Deduction registers, challans, returns and the registration certificate, for every year that can still be assessed.
- Answering notices and assessments for earlier years in the usual way.
The repeal is not limited to salaries. Professionals, traders and others who paid the tax themselves under other entries of the Schedule are covered too. The savings clause applies to their earlier years in the same way.
The old slabs, for reference
These were the rates for salary and wage earners, as last revised in 2010. They now matter only for checking deductions, returns and demands for past years.
| Annual salary or wages | Tax |
|---|---|
| Up to ₹1,60,000 | Nil |
| Above ₹1,60,000, up to ₹3,00,000 | ₹125 a month |
| Above ₹3,00,000 | ₹200 a month, and ₹300 in the 12th month |
Other classes paid a yearly amount. Legal and medical practitioners, consultants and agents paid ₹1,500 a year once gross income crossed ₹1,60,000, and ₹2,500 above ₹3,00,000. Dealers registered under the Odisha VAT or GST law paid ₹2,500 a year.
For the states that still levy the tax, our Professional Tax by state page has current slabs and due dates. We handle Employees' Professional Tax registrations, returns and payments as part of PF & ESI compliance, including a review of past PT filings across your locations.
