TAX RATES IN INDIA

Tax Rates in India Corporate Taxes Individual Taxes
 Wealth Tax Gift Tax Tax laws
India USA Tax Treaty Applicable Rates, Tax Rates for USA Companies Doing Business in India, Withholding Taxes for Foreign Companies, Tax Rates for Foreign Companies Doing Business in India; Tax Rates for American Companies Doing Business in India; Tax Strategies for Foreign Companies Palnning to Do Business in India
 

Individual Income Tax Rates

Taxable Income

Tax Rate

Over

Not Over

1. Rs. 190,000 for women and Rs. 240,000 for seniors.    2. An  education cess of 3% is applicable.   3. (a) Tax exemption on interest in Non-Resident (external) Account and on interest payable by a scheduled bank to Non-Resident Indians (NRI's).  (b) Tax exemption on the interest payable by a scheduled bank to a non-resident or a person who is not ordinarily resident on deposits in foreign currency where the acceptance of such deposits by the bank is approved by the RBI. .

Domestic Corporate & LLP Income Taxes Rates

Tax Rate

Effective Tax Rate with surcharge & ed. cess

1. A surcharge of 10% of the income tax is levied, if the taxable income exceeds Rs. 1 million. Educational cess is also added. 2. An Educational Cess is added to the basic tax rates. Surcharge is not applicable to LLP.  Unlike LLP's in the USA where they are pass-through entities for tax purposes, in case of LLP's in India, they are partially pass-through entities for tax paurposes. In India tax an LLP is required to pay income tax on 40% of its income; since an LLP is allowed to pay the balance of 60% as renumerations to it partners. Partners of an LLP are required to pay tax on the amount paid to them. Besides, LLP's are not required to pay dividend distribution tax or Minimum Alternate Tax (MAT).

3. All companies incorporated in India are deemed as domestic Indian companies for tax purposes, even if owned by foreign companies. Contact us for Incorporating in India

Foreign Corporate Income Tax Rates

Withholding Tax Rate for non-treaty foreign companies

Withholding Tax Rates for the USA Companies Doing Business in India under the India USA Tax Treaty

1. Inter-corporate rates where there is minimum holding. There tax rates are applicable under the India USA Tax Treaty. For other countries the tax rates are different under the tax treaties between India and other countries, including Australia, Austria, Bangladesh, Belgium, Brazil, Belarus, Bulgaria, Canada, China, Cyprus, Czechoslovakia, Denmark, Finland, France, Germany, Greece, Hungary, Indonesia, Israel, Italy, Japan, Jordan, Kazakhstan, Kenya, Libya, Malta, Malaysia, Mauritius, Mongolia, Namibia, Nepal, Netherlands, New Zealand, Norway, Oman, Philippines, Poland , Qatar , Romania, Singapore, South Africa , South Korea , Spain , Sri Lanka , Sweden, Switzerland, Syria, Tanzania, Thailand, Trinidad & Tobago, Turkmenistan, Turkey , U.A.E. , U.A.R., U.K., U.S.A., Russian Federation, Uzbekistan, Vietnam and Zambia
2. 10% or 15% in some cases.
3. Withholding tax is charged on estimated income, as approved by the tax authorities.
4. There are other favorable tax rates under various tax treaties between India and other countries..

Wealth Tax

Net Taxable Wealth

Tax Rate

Over

Not Over

Wealth tax is levied on non-productive assets whose value exceeds Rs.1.5 million. Productive assets like shares, debentures, bank deposits and investments in mutual funds are exempt from wealth tax. The non-productive assets include residential houses, jewelry, bullion, motor cars, aircraft, urban land, etc. Foreign nationals are exempt from wealth tax on non-Indian assets.  In arriving at the net taxable wealth, any debt incurred in acquiring specified assets is deductible.

Gift Tax

Net Taxable Gift

Tax Rate

Over

Not Over

Gifts to dependent relatives at the time of marriage are exempt upto Rs.100,000.  Foreign nationals are exempt from gift tax on non-Indian assets.

US$1=Indian Rs. 62 app.
All rates as per on the date of update.
For Updated Tax Rates and International Tax Treaties Contact us

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Corporate Income Tax in India

For companies, income is taxed at a flat rate of 25% for Indian companies. 

From the tax year 2005-06, electronic filing of company returns is mandatory.

Fringe Benefit Tax

Fringe Benefit Tax is a tax payable by companies against benefits that are seen by employees but cannot be attributed to them individually. This tax is paid as 33.99% of the benefit, which is only a percentage of the actual amount paid.

Some fringe benefits and their taxable rates are mentioned:

From April 1, 2007 , Employees Stock Option Plan (ESOP) or Sweat Equity has also been brought within ambit of fringe benefit tax. Section 115WB(1)(d) specifies that any ESOP will attract Fringe Benefit Tax, and the benefit is equal to the difference between the price paid and the fair market value of the share, as determined by the Board. Tax is levied on the date of vesting of such options. "Fair Market Value" is not yet defined by the Income Tax Department.
 

 

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