India

Overview

Last reviewed - 24 May 2022

India, a country in South East Asia, is the seventh-largest country by geographical area, the second-most populous country with over 1.25 billion people, and the most populous democracy in the world. It is bounded by the Indian Ocean to the south, the Arabian Sea to the southwest, and the Bay of Bengal to the southeast. It shares land borders with Pakistan to the west; Bhutan, the People's Republic of China, and Nepal to the northeast; and Bangladesh and Myanmar to the east. India is divided into 28 states and eight union territories, with New Delhi as the capital. The official languages of India are Hindi and English, and the currency is the Indian rupee (INR).

India gained independence in 1947 and is developing into an open-market economy. Economic liberalisation, including reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth rate, estimated at 5% in tax year 2020/21 (tax year begins on 1 April and ends on 31 March of the following year; note that, in India, 'tax year' is referred to as 'financial year' and the year following a 'tax year' is referred to as 'assessment year').

Over the seven decades since independence, the country has achieved self-sufficiency in terms of food and grains. India is now a net exporter of food. Life expectancy has more than doubled, literacy rates have quadrupled, health conditions have improved, and a sizeable middle class has emerged. India is now home to globally recognised companies in pharmaceuticals, automobiles, steel, and information and space technologies.

PwC has offices in Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, Pune, and Raipur.

Quick rates and dates

Corporate income tax (CIT) rates
Headline CIT rate (%)

Domestic companies

1. 25% or 30% (applicable surcharge and cess) depending on turnover

2. 15% or 22% (applicable surcharge and cess) subject to certain conditions

Foreign companies (having Permanent Establishment in India)

40% (applicable surcharge and cess)

Please refer to “Corporate - Taxes on corporate income” for effective tax rates for different classes of companies.

Corporate income tax (CIT) due dates
CIT return due date

31 October of succeeding tax year.

30 November of succeeding tax year if the corporation has international transactions with associate affiliates/specified domestic transactions.

CIT final payment due date

Before submission of return of income.

CIT estimated payment due dates

Estimated tax is due in quarterly instalments payable before the 15th day of each quarter of tax year (i.e. 15 June [15%], 15 September [45%], 15 December [75%], 15 March [100%]).

Personal income tax (PIT) rates
Headline PIT rate (%)

42.744 (i.e. 30% + 37% surcharge + 4% health and education cess)

Personal income tax (PIT) due dates
PIT return due date

31 July of the succeeding tax year.

31 October of succeeding tax year if accounts are required to be audited under income tax law or under any other law for the time being in force.

30 November of succeeding tax year if there are international transactions with associate affiliates/specified domestic transactions.

PIT final payment due date

Before the submission of return of income.

PIT estimated payment due dates

Estimated tax need to be paidis due in quarterly instalments payable before 15th day of each quarter of tax year (i.e. 15 June [15%], 15 September [45%], 15 December [75%], 15 March [100%]).

Value-added tax (VAT) rates
Standard VAT rate (%)

The rate of GST varies from 5% to 28% depending upon the category of goods and services, the general rate of tax being 18%. Additionally, for certain goods a Compensation Cess is also levied at various rates prescribed by the Government.

Withholding tax (WHT) rates
WHT rates (%) (Dividends/Interest/Royalties)

Dividend - Resident: 10%/ Non-resident: 20%*;

Interest - Resident: 10%/ Non-resident: 5%-40%*;

Royalty - Resident: 2%-10%/ Non-resident: 10%*;

Fees for Technical Services - Resident: 2%-10%/ Non-resident - 10%*

(For non-residents, the above are to be enhanced by applicable surcharge and health and education cess)

* Subject to the rates provided under Double Taxation Avoidance Agreement (DTAA)

Capital gains tax (CGT) rates
Headline corporate capital gains tax rate (%)

10%/ 20% (applicable surcharge and cess) long-term and 15%/ 40% (applicable surcharge and cess) short-term (may be exempt under DTAA)

Please refer to "Income Determination - Capital Gains" for more details.

Headline individual capital gains tax rate (%)

Long-term capital gain: 10 (on sale of equity shares/units of equity oriented funds/units of business trust in excess of INR 100,000 and security transaction tax is paid). For others, 10 for non-residents (without cost inflation adjustment) 20 for residents/non-residents (with cost inflation adjustment).

Short-term capital gain: 15 (if securities transaction tax paid on sale of equity shares/units of equity oriented funds/units of business trust). For others, normal slab rate applies.

Above rates are to be enhanced by surcharge and health and education cess; and benefit of tax treaty for non-residents.

Net wealth/worth tax rates
Headline net wealth/worth tax rate (%)

NA

Inheritance and gift tax rates
Headline inheritance tax rate (%)

NA

Headline gift tax rate (%)

Taxable in the hands of recipient and subject to tax at normal slab rates.

NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

NP stands for Not Provided (i.e. the information is not currently provided in this chart)

All information in this chart is up to date as of the 'Last reviewed' date on the corresponding territory Overview page. This chart has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this chart, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.