Is There Professional Tax in Himachal Pradesh? (2026) What Employers Must Do Instead
No. Himachal Pradesh does not levy professional tax. The state passed a professional tax law in 2005, but repealed it the same year, with effect from 1 November 2005, and none of its budgets since, including 2024-25, 2025-26 and 2026-27, has brought it back. Employers in Himachal therefore deduct no professional tax from salaries and have no PT registration or returns. They still need Shops and Commercial Establishments registration, must pay at least the state minimum wages, and handle PF, ESI and labour code compliance. This guide explains the position and lists what an employer in Himachal must do instead.
Why there is no professional tax in Himachal
- 2005 Act repealed: the Himachal Pradesh Tax on Professions, Trades, Callings and Employments Act, 2005 was repealed by a Repeal Act of 2005 (Act 1 of 2006), effective from 1 November 2005, after protests from lawyers and others. Liabilities for the few months the Act ran were saved.
- Older law gone too: the Punjab professional tax law that applied to areas merged into Himachal in 1966 was repealed for Himachal from 1 April 1967.
- No revival: the 2024-25, 2025-26 and 2026-27 budgets proposed no new tax of this kind. The only new levy in 2026 is a cess of 60 paise a litre on petrol and diesel under the HP VAT Act from 12 August 2026.
Other states and union territories without professional tax include Delhi, Haryana, Uttar Pradesh, Uttarakhand, Rajasthan, Goa and Chandigarh. Our state-wise professional tax guide lists the rates where it applies, and our professional tax state finder shows which states levy it.
What a Himachal employer must still do
| Requirement | Position in 2026 |
|---|---|
| Shops and Commercial Establishments registration | Form 1 to the Labour Inspector within 30 days of opening, in Shimla, municipal areas, cantonments and notified bazaars; valid 5 years; renewal online on labour.hp.gov.in |
| Minimum wages | Shops and commercial establishments from 1 April 2025: ₹425 a day unskilled to ₹513 a day highly skilled (without food or accommodation); 25% more in tribal areas |
| PF | Establishments with 20 or more employees; the PF wage ceiling is ₹25,000 a month from 17 September 2026 |
| ESI | Establishments with 10 or more employees in notified areas; employees earning up to ₹21,000 a month |
| Labour codes | In force from 21 November 2025; Himachal’s own rules under all four codes were still in draft in October 2026, so older state rules continue meanwhile |
| Labour welfare fund | Himachal does not have one |
| Building workers’ cess | 1% of the cost of construction for building projects |
Shops and Establishments registration
- The HP Shops and Commercial Establishments Act, 1969 still applies; it has not been replaced.
- Register within 30 days of starting, and inform the inspector of working hours and rest intervals within 15 days of registration.
- Fees depend on the number of employees, from ₹50 for an establishment with no employees to ₹2,000 for more than 25.
- Registration lasts five years. Renewing more than 30 days late costs 50% extra; online renewal is treated as granted once the fee is paid.
- Hotels, homestays, cafés and travel businesses also need tourism registration. See our guides to hotel registration in Himachal and homestay registration.
Minimum wages
| Shops and commercial establishments | Per day (without food or accommodation) | Per month |
|---|---|---|
| Unskilled | ₹425 | ₹12,750 |
| Semi-skilled | ₹449 | ₹13,470 |
| Skilled | ₹493 | ₹14,790 |
| Highly skilled | ₹513 | ₹15,390 |
These rates were notified in June 2025 with effect from 1 April 2025. Himachal usually notifies the year’s revision a few months late, backdated to 1 April, so keep a provision for arrears for 2026-27. Lower rates apply where the employer provides food and accommodation, and manufacturing and construction have their own rates.
Hiring local people
- Industrial units: units claiming incentives under the HP Industrial Investment Policy, 2019 must employ at least 80% bona fide Himachalis at all levels, from the start of production; breaching it stops incentives and allows recovery. The 2019 policy was extended into October 2026 while a new policy is finalised, so check the conditions in force when you apply.
- Tourism units: the Tourism Department’s checklist for new hotels asks for an undertaking on employing Himachalis (70% of staff).
- Vacancies: industrial units notify vacancies to the employment exchange and get a non-availability certificate before hiring from outside.
- Bona fide Himachali means an Indian citizen with a permanent home in Himachal, or who has lived there for 20 years or more, certified by the SDM or Tehsildar.
Income tax for employees in Himachal
Because no professional tax is deducted, a salaried employee in Himachal has nothing to claim under section 19 of the Income-tax Act, 2025, which allows professional tax as a deduction from salary under the old regime. The employer deducts TDS on salary under section 392 as anywhere else. An employee transferred from a state that levies professional tax, such as Punjab or Karnataka, will see the deduction stop from the month of transfer.
Frequently asked questions
Is professional tax applicable in Himachal Pradesh?
No. Himachal repealed its professional tax law with effect from 1 November 2005, and it has not been reintroduced.
Does a company in Himachal need PT registration?
No. There is no professional tax registration or return in Himachal. A company with a branch in another state that levies professional tax registers there for its staff in that state.
Is there a labour welfare fund in Himachal Pradesh?
No. Himachal is not among the states that collect labour welfare fund contributions.
What is the minimum wage in Himachal Pradesh?
For shops and commercial establishments, ₹425 a day for unskilled workers and up to ₹513 a day for highly skilled workers, from 1 April 2025, with a revision for 2026-27 expected.
TAXAJ’s Himachal team handles payroll, PF, ESI, labour registrations, GST and books for hotels, homestays, adventure operators and industrial units. Talk to our Manali office.
Last updated 27 October 2026. Sources: Himachal Pradesh Tax on Professions, Trades, Callings and Employments (Repeal) Act, 2005 (Act 1 of 2006); Punjab Professions, Trades, Callings and Employments Taxation (Himachal Pradesh Repealing) Act, 1968; HP Budget speeches 2024-25 to 2026-27 and PRS budget analysis; HP VAT (Amendment) Act, 2026; HP Shops and Commercial Establishments Act, 1969 and Rules as amended in 2005; HP Labour Department minimum wages notification Shram(A)4-1/2024 of 24 June 2025; draft Himachal rules under the labour codes (2026); S.O. 5109(E) on the EPF wage ceiling; HP Industrial Investment Policy, 2019 and its 2026 extensions; HP Personnel Department instructions on bona fide Himachali certificates (2021); Income-tax Act, 2025, sections 19 and 392. General information only.
