Professional tax is a state-level charge on anyone earning an income from employment, a profession or a trade. Despite the name it has nothing to do with professional qualifications; it applies to salaried staff generally.
Why it varies so much
Because it is a state tax, the rules differ across India. Some states levy it and some do not. Those that do set their own slab rates, their own filing calendar and their own registration process. An employer with staff spread across several states may be registered with several state authorities at once, each with a different deadline.
How it is collected
The employer deducts the amount from the employee's salary and remits it to the state. The employer is also usually required to hold a registration certificate in its own right, and in some states pays a separate charge for the privilege of employing people there.
Why it matters when hiring internationally
The sums are small, often a few hundred rupees a month, but the compliance burden is not proportional to the amount. A company hiring one employee in a new Indian state can find itself needing a fresh state registration for a tax worth very little. This asymmetry is a common reason companies use an Employer of Record for early hires in India rather than registering directly.