India Tax Rates
India operates a progressive income tax system administered by the Central Board of Direct Taxes (CBDT) under the Income Tax Department. The country offers two tax regimes: the old regime with various deductions and exemptions, and a new simplified regime with lower rates but fewer deductions. India levies an 18% standard GST rate, a 22% standard corporate tax rate (with a 15% rate for new manufacturing companies), and taxes capital gains at varying rates depending on the asset type and holding period.
Top Income Tax Rate
42.7%
Corporate Tax Rate
25.2%
VAT / Sales Tax
18%
Capital Gains Tax
20%
Detailed Tax Information
Income Tax Brackets
India's new tax regime (default from FY 2023-24) applies progressive rates from 0% to 30% on income above INR 15 lakh, with a standard deduction of INR 75,000 for salaried individuals. The old regime offers higher rates but allows numerous deductions under sections like 80C (up to INR 1.5 lakh), 80D (health insurance), and HRA exemptions. A surcharge of 10-37% applies on higher incomes, plus a 4% health and education cess, bringing the effective top rate to approximately 42.74% under the old regime. Under the new regime, the maximum surcharge is capped at 25%, resulting in a top effective rate of about 39%.
| Income Range | Tax Rate |
|---|---|
| ₹0 – ₹300K | 0% |
| ₹300K – ₹700K | 5% |
| ₹700K – ₹1.0M | 10% |
| ₹1.0M – ₹1.2M | 15% |
| ₹1.2M – ₹1.5M | 20% |
| ₹1.5M+ | 30% |
Corporate Tax
India's corporate tax system offers multiple rate structures. Domestic companies can opt for a 22% rate (effective ~25.17% with surcharge and cess) under Section 115BAA if they forgo certain deductions and exemptions. New domestic manufacturing companies incorporated after October 1, 2019, and commencing production before March 31, 2024, can opt for a 15% rate (effective ~17.16%) under Section 115BAB. Companies not opting for these concessional rates are taxed at 30% (turnover above INR 400 crore) or 25% (turnover up to INR 400 crore), plus applicable surcharge and cess.
Standard Rate
25.2%
Small Business Rate
25.2%
Capital Gains Tax
India's capital gains tax depends on the asset type and holding period. From FY 2024-25, long-term capital gains (LTCG) on all assets are taxed at a uniform 12.5% without indexation benefit. Short-term capital gains (STCG) on listed equity and equity mutual funds are taxed at 20%, while STCG on other assets is taxed at the individual's applicable slab rate. Listed equity and equity mutual funds are considered long-term if held for more than 12 months; unlisted shares and immovable property require 24 months; and other assets require 24 months for long-term classification.
Short-Term Rate
20%
Long-Term Rate
12.5%
Rate
20%
VAT / Sales Tax
India's GST regime underwent a major transformation with GST 2.0 reforms effective September 2025. The simplified structure has three main rates: 5%, 18%, and 40%. The general rate of 18% applies to the majority of supplies. The new 40% rate replaced the earlier 28% GST plus cess structure for luxury and sin goods. Daily-use items moved to lower rates, with goods like ACs, small cars, TVs, and motorbikes now at 18% instead of 28%. GST is administered jointly by the central government (CGST) and state governments (SGST), with an integrated GST (IGST) on inter-state supplies.
Standard Rate
18%
Cryptocurrency Tax
India introduced a specific tax framework for Virtual Digital Assets (VDAs) including cryptocurrencies effective April 1, 2022. All gains from the transfer of VDAs are taxed at a flat 30% (plus applicable surcharge and cess), with no deduction allowed except the cost of acquisition. No set-off of losses against other income or carry-forward of crypto losses is permitted.
Tax Treaties
India has a comprehensive network of over 95 Double Taxation Avoidance Agreements (DTAAs) with countries worldwide. These treaties provide relief from double taxation through exemption or credit methods and typically reduce withholding tax rates on dividends, interest, and royalties. India adopted the Multilateral Instrument (MLI) in 2019 to modify its bilateral treaties in line with BEPS recommendations. Notable treaties include those with Mauritius and Singapore, which have been renegotiated to include source-based taxation of capital gains.
Treaty Network
95
Double taxation agreements
Major treaty partners:
Key Details
Relocate to India
See how much you could save by moving here from your current country.
+$12K
Tax in United States
$24K
24.4% effective
Tax in India
$12K
12% effective
You Save
50.7%
less tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
