India (IN)
India is the world's most populous nation and a fast-rising global power — a vibrant federal republic of extraordinary cultural, linguistic, and geographic diversity.
Tax & Payslip Guide
Understanding your taxes in India — tax year April 1 to March 31 (e.g., FY 2025-26 runs April 1 2025 to March 31 2026; AY 2026-27).
📊 Income Tax Brackets
| Income from | Income to | Rate | Notes |
|---|---|---|---|
| 0 | 400,000 | 0% | Zero tax — New Tax Regime (default from FY2025-26 / AY2026-27). Tax-free up to ₹4 lakh. Budget 2025-26 restructured the New Tax Regime slabs effective April 1 2025, adding a new ₹20–24 lakh bracket and expanding the zero-rate band. |
| 400,000 | 800,000 | 5% | New Tax Regime: ₹4–8 lakh. Section 87A rebate of ₹60,000 means zero net tax for income up to ₹12 lakh (₹12.75 lakh for salaried taxpayers with ₹75,000 standard deduction). |
| 800,000 | 1,200,000 | 10% | New Tax Regime: ₹8–12 lakh. |
| 1,200,000 | 1,600,000 | 15% | New Tax Regime: ₹12–16 lakh. |
| 1,600,000 | 2,000,000 | 20% | New Tax Regime: ₹16–20 lakh. |
| 2,000,000 | 2,400,000 | 25% | New Tax Regime: ₹20–24 lakh. New bracket introduced in Budget 2025-26. |
| 2,400,000 | ∞ | 30% | New Tax Regime: above ₹24 lakh. Standard deduction of ₹75,000 available to salaried employees and pensioners. |
🏛️ Social Contributions
Mandatory for establishments with 20+ employees. Interest rate ~8.25% for FY2025-26. Withdrawable on retirement or emigration. Expat employees may apply for Certificate of Coverage from EPFO if India has a Social Security Agreement with home country.
Provides medical, maternity, sickness, and disability benefits. Only applicable if monthly gross salary ≤ ₹21,000. Most expats earning above this threshold are exempt.
State-level tax deducted from salary. Maharashtra: up to ₹2,500/year. Karnataka: up to ₹2,400/year. Not applicable in all states. Deductible from income tax.
🛒 VAT Rates
GST (Goods and Services Tax) replaced multiple state/central taxes from 2017. Four main slabs: 0%, 5%, 12%, 18%. Luxury goods, cars, tobacco: 28% + cess. IGST for inter-state transactions; CGST+SGST for intra-state. GST portal: gst.gov.in.
🧾 Sample Payslip Decoder
🌍 Special Expat Tax Rules
Tax Residency: You are a tax resident in India if you spend 182+ days in India during the tax year (April 1 – March 31), OR 60+ days in the current year AND 365+ days in the preceding 4 years. Residents pay income tax on worldwide income. Non-residents pay tax only on India-sourced income. RNOR (Resident but Not Ordinarily Resident) is a transitional status for returning NRIs. Expatriates on Employment Visas are typically taxed as residents if they meet the 182-day test. TDS (Tax Deducted at Source): Employers deduct advance income tax monthly and deposit with government. Final liability calculated at year end. Many expat packages include "tax equalisation" — employer handles the tax burden. Old Tax Regime: optionally available with 80C (₹1.5L), HRA, LTA, and other deductions — beneficial for those with large deductions.
📋 Double Tax Treaties
India has Double Taxation Avoidance Agreements (DTAA) with 90+ countries including USA, UK, Germany, UAE, Singapore, Japan, Australia, Canada, France, Netherlands. DTAAs typically provide relief through exemption or tax credit method. Some DTAAs (India-UAE, India-Singapore) have been amended to prevent misuse. Expats should file Form 10F and obtain Tax Residency Certificate (TRC) from home country to claim treaty benefits. Consult a CA (Chartered Accountant) for specific country treaty application.
Tax & Payslip
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