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Government of Odisha Stops Professional Tax Deduction from April 2026 | Finance Dept Letter No.10676
Non-Deduction of Tax on Professions from April 2026 Onwards
Department: Finance Department, Government of Odisha
Letter No: 10676 | Date: 22.04.2026
Addressed to: All Departments of Government / All Heads of Department
All Drawing and Disbursing Officers (DDOs) are hereby instructed to discontinue deduction of Tax on Professions from the salaries of employees with effect from April 2026 onwards, following the repeal of the Odisha State Tax on Professions, Trades, Callings and Employments Act, 2000 under Odisha Ordinance 02 of 2026.
✅ Direct Impact: Employees of Government of Odisha will no longer have Profession Tax deducted from their salary bills starting from the salary of April 2026.
Key Details
1. Issuing Authority
Finance Department, Government of Odisha.
2. Addressees
All Departments of Government and All Heads of Department.
3. Legal Basis
Odisha State Tax on Professions, Trades, Callings and Employment (Repeal) Ordinance, 2026 (Odisha Ordinance 02 of 2026).
4. Action Required
All DDOs must stop deducting Tax on Professions from employee salaries w.e.f. April 2026.
5. Effective From
Salary bills of April 2026 onwards (Act repealed w.e.f. 01.04.2026).
📄 View Full text of the Official Letter
To
All Departments of Government /
All Heads of Department
Sub: Regarding non-deduction of Tax on Professions from April, 2026 onwards
Madam/Sir,
I am directed to state that the Odisha State Tax on Professions, Trades, Callings and Employment Act, 2000, has been repealed with effect from 01.04.2026 as per the Odisha State Tax on Professions, Trades, Callings and Employment (Repeal) Ordinance, 2026 (copy enclosed).
Therefore, it is requested that all Drawing and Disbursing Officers (DDOs) under your administrative control may be instructed to discontinue deduction of Tax on Profession from the salaries of employees with effect from April 2026 onwards.
Note: This letter directs DDOs to discontinue future deductions. However, any profession tax already deducted and deposited for periods prior to April 2026, as well as any pending arrears for earlier periods, will continue to remain valid and recoverable under the savings clauses of the Repeal Ordinance (Section 2(2)).
⚠️ Important for DDOs: If any DDO has already deducted Profession Tax from the salary of April 2026 before receiving this letter, appropriate adjustment may need to be made in subsequent salary bills. DDOs should ensure compliance is reflected in the treasury bill submission from April 2026 onwards.
📄 Official Finance Department Letter (PDF): View / Download
WhatsApp Telegram Facebook PDFFrequently Asked Questions (FAQ)
1. What does Finance Department Letter No.10676 dated 22.04.2026 say?
It directs all DDOs to discontinue deduction of Tax on Professions from salaries of employees with effect from April 2026 onwards, following the repeal of the Profession Tax Act, 2000.
2. From which month will Profession Tax stop being deducted?
From the salary of April 2026 onwards, as the Act stands repealed w.e.f. 01.04.2026.
3. Who has issued this instruction?
The Finance Department, Government of Odisha, has issued this instruction addressed to All Departments of Government and All Heads of Department.
4. Is this applicable to all government employees?
Yes. The letter is addressed to all DDOs under the administrative control of all Departments and Heads of Department, making it applicable to all government employees from whom Profession Tax was being deducted.
5. What is the legal basis for stopping the deduction?
The Odisha State Tax on Professions, Trades, Callings and Employment (Repeal) Ordinance, 2026 (Odisha Ordinance 02 of 2026), which repealed the Act w.e.f. 01.04.2026.
6. Will profession tax already deducted for earlier periods be refunded?
No. The Repeal Ordinance's savings clauses (Section 2(2)) protect all previous operations, taxes paid, and arrears to be realized. Only future deductions are discontinued.
7. If a DDO already deducted profession tax for April 2026, what should be done?
DDOs who have already deducted the tax before receiving this letter should make appropriate adjustments in subsequent salary bills to ensure compliance.
8. Does this apply to autonomous bodies and local bodies?
The letter is addressed to All Departments and Heads of Department of the Government. However, since the parent Act itself is repealed, the deduction cannot be legally continued by any entity under the Act.
9. Is there a separate notification for private sector employees?
The repeal of the Act applies universally. This specific letter only covers government DDOs. Employers in the private sector should also take note of the repeal and discontinue deductions accordingly.
10. What is the connection between this letter and Ordinance 02 of 2026?
This letter is the operational follow-up to Ordinance 02 of 2026. While the Ordinance repealed the Act, this Finance Department letter translates that repeal into actionable instructions for DDOs to stop deducting the tax.