Odisha Abolishes Professional Tax from April 2026: Key Details of the Repeal Ordinance

23 Apr 2026, 07:57 by Vinay Kakkad · KalingaTV

Starting April, 2026, the Odisha government is scrapping Professional Tax statewide. The state cabinet cleared the Odisha Professional Tax (Repeal) Ordinance, 2025, which effectively eliminates the Odisha State Tax on Professions, Trades, Callings and Employments Act, 2000—the law that’s been in place for over 20 years. The news got a lot of attention during the FY 2026-27 State Budget, but now the ordinance puts the legal structure in place for a clean handover when the new financial year begins.

Chief Minister Mohan Charan Majhi, who’s also in charge of Finance, said they made this change mainly to fix the problem of double taxation. During pre-budget talks, a bunch of groups pointed out that salaried workers and professionals already pay Income Tax to the Centre, thus adding a State Professional Tax came across as an unfair, overlapping problem. Now, with this tax gone, the government says things get less complicated for staff and operations run more smoothly for employers, who no longer have to worry about the additional paperwork and regulatory requirements.

Dropping this tax does not come cheap—the state stands to forgoe about ₹320 crore in revenue each year. Still, the government decided it’s worth it to give relief to a wide range of people, from government and private employees to independent professionals such as doctors, lawyers, engineers, and chartered accountants. Groups like the Bharatiya Mazdoor Sangh (BMS) and other labor unions are backing the decision, pointing out that it lets contractual workers and those earning less off the hook from that maximum ₹2,500 annual tax hit they used to face.

One thing to keep in mind: this change only kicks in from April 2026. Income earned before that—including all of FY 2025-26—still needs to have Professional Tax paid and returns (Form V) filed as usual. Furthermore, as the tax will no longer be paid from FY 2026-27, the deduction previously available under the old regime of the Income Tax Act, 1961 for Professional Tax paid will naturally cease to exist for Odisha taxpayers. Organizations have been told to update their payroll systems and drop the Professional Tax calculation starting with salaries in April 2026.