1. Taxes on corporate income

    Companies residents in India are taxed on their worldwide income arising from all sources in accordance with the provisions of the Income Tax Act. Non-resident corporations are essentially taxed on the income earned from a business connection in India or from other Indian sources. A corporation is deemed to be resident in India if it is incorporated in India or if it‟s control and management is situated entirely in India.

    Domestic corporations are subject to tax at a basic rate of 35 % and a 2.5 % surcharge. Foreign corporations have a basic tax rate of 40 % and a 2.5 % surcharge. In addition, an education cess at the rate of % on the tax payable is also charged. Corporates are subject to wealth tax at the rate of 1 %, if the net wealth exceeds INR 1.5 mn (equals approx. CHF 45,000, EUR 27,000, USD 37,000).

    Domestic corporations have to pay dividend distribution tax at the rate of 12.5 %, however, such dividends received are exempt in the hands of recipients.

  2. Capital gains tax

    Tax is payable on capital gains on sale of assets.

    Long-term Capital Gains Tax is charged if
    • Capital assets are held for more than three years and
    • In case of shares, securities listed on a recognized stock exchange in India, units of specified mutual funds, the period for holding is one year.
    Long-term capital gains are taxed at a basic rate of 20 %. However, long-term capital gain from sale of equity shares or units of mutual funds are exempt from tax.

    Short-term capital gains are taxed at the normal corporate income tax rates. Short-term capital gains arising on the transfer of equity shares or units of mutual funds are taxed at a rate of 10 %. Long-term and short-term capital losses are allowed to be carried forward for eight consecutive years. Long-term capital losses may be offset against taxable long-term capital gains and short-term capital losses may be offset against both long term and short-term taxable capital gains.

  3. Personal income tax

    Personal income tax is levied by Central Government and is administered by Central Board of Direct taxes under Ministry of Finance in accordance with the provisions of the Income Tax Act. The rates for personal income tax are as follows:
    • Income up to
    • INR 100,000 *
    • 0 %
    • Income from
    • INR 100,001 to INR 150,000
    • 10 %

    • Income from
    • INR 150,001 to INR 250,000
    • 20 %

    • Income excessing
    • INR 250,000
    • 30 %
    Surcharges of 10 % on total tax is levied if income exceeds INR 850,000.

    * INR 100„000 equals approx. CHF 3,000, EUR 1,800, USD 2,500