India
Asia
India has one of the world's largest and most complex tax systems. The Income Tax Act of 1961 governs direct taxes, while the Goods and Services Tax (GST) Act unifies indirect taxation. India uses a self-assessment system where taxpayers calculate and declare their own tax liability. The tax year runs from April 1 to March 31, with returns due July 31 for individuals. India offers two tax regimes: the old regime with deductions and exemptions, and the new regime with lower slab rates but limited deductions.
How Taxation Works in India
Understand the basics of India's tax system, who pays tax, and how rates apply to individuals and businesses.
Tax System
India uses a self-assessment tax system. Taxpayers calculate their own tax liability based on their income, deductions, and applicable tax rates. Tax is collected through three main mechanisms: TDS (Tax Deducted at Source), advance tax (quarterly payments), and self-assessment tax (paid with the tax return). The Income Tax Department verifies returns through scrutiny assessments and best judgment assessments.
Residents
Any individual earning income in India is liable to pay tax. This includes salaried individuals, self-employed professionals, business owners, and investors. Resident individuals are taxed on their worldwide income, while non-residents are taxed only on income sourced in India. Companies, whether domestic or foreign, pay tax on Indian-sourced income.
Non-Residents
Resident individuals are taxed on their worldwide income. Non-resident individuals are taxed only on income earned or received in India. The residential status is determined based on the number of days spent in India during the financial year and the preceding four years. RNOR (Resident but Not Ordinarily Resident) individuals have a hybrid status — taxed on Indian income and foreign income received in India.
Individuals
India has a progressive income tax system with rates ranging from 0% to 30%. The new regime offers concessional rates with fewer deductions, while the old regime has lower rates but allows extensive deductions under Sections 80C, 80D, HRA, and others. Salaried individuals can claim standard deduction of ₹75,000 in the new regime.
Businesses
Domestic companies pay corporate tax at 22% (reduced rate without exemptions) or 30% (with exemptions). Foreign companies are taxed at 40% on Indian-sourced income. Surcharge and health and education cess apply on top of the base tax rate. Small companies with turnover below the threshold may benefit from reduced rates.
Financial Year vs Assessment Year
The Financial Year (FY) is the year in which income is earned (April 1 – March 31). The Assessment Year (AY) is the following year when the income is assessed and taxed.
Residential Status
Your tax liability in India depends on your residential status — Resident, Resident but Not Ordinarily Resident (RNOR), or Non-Resident. Each status has different tax implications.
Gross Total Income
The sum of all income heads (salary, house property, business/profession, capital gains, and other sources) before any deductions or exemptions.
Tax Deducted at Source (TDS)
A tax collection mechanism where tax is deducted at the point of payment. Common for salary, interest, rent, and professional fees.
Current Tax Information
FY 2025-26 (AY 2026-27) tax slabs, rates, thresholds, and key deductions for India.
| Rate | Threshold | Notes |
|---|---|---|
| 0% | ₹0 – ₹4,00,000 | New regime; rebate under Section 87A |
| 5% | ₹4,00,001 – ₹8,00,000 | New regime |
| 10% | ₹8,00,001 – ₹12,00,000 | New regime |
| 15% | ₹12,00,001 – ₹16,00,000 | New regime |
| 20% | ₹16,00,001 – ₹20,00,000 | New regime |
| 25% | ₹20,00,001 – ₹24,00,000 | New regime |
| 30% | Above ₹24,00,000 | New regime; old regime rates apply with deductions |
Standard Deduction
₹75,000 for salaried individuals under the new regime. Standard deduction is a fixed amount that reduces taxable income without requiring documentation of specific expenses.
Major Deductions
- Section 80C
Up to ₹1,50,000 deduction for investments in PPF, ELSS, NSC, life insurance premiums, and more.
- Section 80D
Deduction for health insurance premiums — up to ₹25,000 for self and family (₹50,000 for senior citizens).
- HRA
House Rent Allowance deduction for salaried individuals paying rent.
- Standard Deduction
₹75,000 standard deduction for salaried individuals (new regime).
- Section 80TTA
₹10,000 deduction on savings account interest.
- Section 80E
Deduction on interest paid on education loans.
Tax Credits
- Section 87A Rebate
Rebate of up to ₹12,500 for individuals with taxable income up to ₹7,00,000 in the new regime.
- Surcharge
10% surcharge on income above ₹50,00,000; 15% above ₹1,00,00,000; 25% above ₹2,00,00,000; 37% above ₹5,00,00,000.
- Health and Education Cess
4% cess on income tax and surcharge.
Important Dates
Key deadlines for India tax filing, payments, and important milestones.
ITR Filing Deadline (Individuals)
Last date to file Income Tax Return for FY 2024-25 unless extended by the government.
Financial Year End
End of the financial year (April 1, 2024 – March 31, 2025).
New Financial Year Begins
Start of FY 2025-26; new tax rates and thresholds apply.
Advance Tax Installment 3
Third installment of advance tax due.
Advance Tax Installment 4
Final installment of advance tax due.
Government Resources
For the most accurate and up-to-date information, visit the official government tax authority. Below are the most useful official portals, forms, and support resources for India taxpayers.
Income Tax Department
Official portal for ITR filing, tax forms, notices, and circulars.
https://www.incometax.gov.in
CBDT Official Website
Central Board of Direct Taxes — policies, circulars, and notifications.
https://www.incometax.gov.in
GST Portal
GST registration, returns filing, and compliance portal.
https://www.gst.gov.in
TRACES
TDS Reconciliation Analysis and Correction Enabling System.
https://www.traces.gov.in
Popular India Calculators
Estimate your tax liability with our free India calculators. All calculations run locally in your browser — no data is collected.
Income Tax Calculator
Estimate your India income tax calculator with current rates and rules.
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Open calculator →Frequently Asked Questions
Quick answers to common questions about India taxation, filing requirements, and using our calculators.
What is the difference between the old and new tax regime?
The old regime offers lower tax rates but allows deductions and exemptions (Section 80C, HRA, etc.). The new regime has concessional rates but limited deductions — choose based on your deductions and income level.
What is the ITR filing deadline?
July 31st for individuals unless extended by the government. Business taxpayers have a different deadline (usually September 30th).
Who is a tax resident in India?
An individual is a tax resident if they stay in India for 182 days or more in a financial year, or 60 days or more and have been in India for 365 days or more in the preceding 4 years.
What is TDS and how does it work?
TDS (Tax Deducted at Source) is a mechanism where the payer deducts tax before making a payment. The deducted amount is deposited with the government and credited to the payee's tax account.
How do I file my ITR online?
Visit the Income Tax e-filing portal, log in with your PAN, select the appropriate ITR form, fill in your income and deductions, and submit. You can also use the new tax regime calculator to estimate your liability.
Trust & Transparency
Last Updated
2025-06-15
Educational Disclaimer
The tax information and calculators on this page are for educational and informational purposes only. They do not constitute professional tax advice. Tax laws are subject to change. Always consult a qualified tax professional for advice specific to your situation.
Calculation Methodology
Tax calculations follow the official Indian Income Tax Act, 1961 and Finance Act provisions. Brackets and rates are sourced from the latest CBDT notifications. The new regime rates are applied as per the Finance Act 2024-25. Deductions and exemptions are calculated based on the applicable regime selected by the taxpayer.
Data Sources
- Central Board of Direct Taxes (CBDT)
- Ministry of Finance, Government of India
- Income Tax Department Official Portal
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All calculations are performed locally in your browser. No personal data is collected, stored, or transmitted to any server. Your financial information never leaves your device.
