India 2026 Compliance Updates: Key State-Level Changes

Effective 2026, several Indian state and municipal authorities have introduced or operationalized changes relevant to payroll and labour compliance. These updates covers professional tax timelines and slab structures, as well as labour registration and welfare-related obligations in selected jurisdictions.

Maharashtra Professional Tax changes

Maharashtra amended Rule 11(3) of the Profession Tax Rules, 1975 with effect from 28 February 2026.

For the March return period and annual periodicity, the prescribed due date has been advanced to 15 March, and related references to the ‘last date’ have been replaced with the ‘15th day’, as reflected in the amended rule and the State Tax trade circular.

Karnataka: Labour Welfare Changes

The scope of the Karnataka Labour Welfare Fund (LWF) was expanded by the Karnataka Labour Welfare Fund (Amendment) Act, 2025, effective January 7, 2026.

The mandatory applicability threshold has been reduced from establishments employing 50 or more persons to those employing 10 or more persons.

Contribution rates are unchanged: ₹50 for the employee and ₹100 for the employer.

All LWF contributions must now be made exclusively through digital payment methods; physical instruments are no longer accepted.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.

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India – State-Level Compliance Changes – 2026

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