India Tax Rates

Corporate Income Tax:

• The standard corporate income tax rate varies for domestic and foreign companies.
• Specific rates apply to different types of companies and industries.
• Minimum Alternate Tax (MAT) is applicable in certain situations.

Individual Income Tax:

• Individual income tax rates are progressive.
• Tax rates vary based on residency status and income brackets.
• Non-resident individuals are taxed on income sourced in India.

Goods and Services Tax (GST):

• GST is an indirect tax levied on the supply of goods and services.
• It has replaced several previous indirect taxes.
• GST rates vary for different goods and services.
• Input Tax Credit is applicable.

Withholding Tax:

• Payments to non-residents are subject to withholding tax.
• The withholding tax rate is determined by the Income Tax Act and Double Taxation Avoidance Agreements (DTAAs).
• Withholding tax applies to payments like dividends, interest, royalties, and technical fees.

Capital Gains Tax:

• Capital gains are taxed based on the type of asset and holding period.
• Different tax rates apply to short-term and long-term capital gains.
• DTAAs may impact capital gains taxation.

Dividend Taxation:

• Dividends are taxed in the hands of the shareholders.
• The tax rate applicable to non-resident shareholders depends on the Income Tax Act and applicable DTAAs.
• Double Taxation Avoidance Agreements (DTAAs):
• India has DTAAs with numerous countries.
• These agreements aim to prevent double taxation of income.
• DTAAs may reduce withholding tax rates or provide exemptions.

Tax Residency:

• Tax residency is determined by factors such as the number of days spent in India and the individual's source of income.
• Specific rules apply to determine residency status.

Permanent Account Number (PAN):

• PAN is a mandatory identification number for tax purposes.
• Foreign investors may be required to obtain a PAN.

Tax Compliance:

• Taxpayers are required to file income tax returns and comply with other tax regulations.
• Electronic filing is mandatory for many taxpayers.

Transfer Pricing:

• Transfer pricing regulations apply to transactions between related parties.
• These regulations aim to prevent tax evasion.

Equalization Levy:

• The equalization levy is applicable to specific digital services provided by non-resident entities.

Tax Audits:

• The Indian tax authorities conduct tax audits to ensure compliance.
• It is important to seek professional tax advice specific to your situation.