Corporate and Personal Tax Rates for NRIs
Corporate Tax Rates
For Foreign Companies:
Base Rate: The corporate tax rate for foreign companies is 40%.
Effective Rate: Often lower due to available deductions and exemptions.
Tax Holidays: Available for businesses set up in Special Economic Zones (SEZs) and certain Infrastructure Sector Projects, offering special tax treatment and holidays.
For Domestic Companies:
Reduced Rates (2019 onwards):
General rate: 22% plus surcharges, leading to an effective tax rate of around 25%.
New manufacturing companies: 15% (with conditions, such as no exemptions or deductions allowed).
Personal Income Tax Rates
General Rates:
10%: For income above ₹2.5 lakhs.
20%: For income above ₹5 lakhs.
30%: For income above ₹10 lakhs.
Surcharges and Cess:
Surcharge:
10%: For income above ₹50 lakhs.
15%: For income above ₹1 crore.
Health and Education Cess: An additional 4% charge on the tax calculated.
Tax-Exempt Incomes for Non-Residents (Section 10 Examples)
Interest on Bonds/Securities:
Notified by the Central Government, including premium on redemption.
Interest on NRE Accounts:
Interest on money standing to the credit in a Non-Resident (External) account in India.
Remuneration for Foreign Employees:
Received by non-Indian citizens as employees of foreign enterprises for services rendered in India, provided:
The foreign enterprise is not engaged in trade or business in India.
Their stay in India does not exceed 90 days in a previous year.
Salary for Services on Foreign Ships:
Salary received by non-residents for employment on foreign ships, provided their total stay in India does not exceed 90 days in the previous year.
Double Taxation Avoidance Agreement (DTAA)
Choice of Provisions: A non-resident can apply either the provisions of the Income Tax Act or the relevant DTAA between India and the counterpart foreign country, whichever is more beneficial.
For a detailed list of tax-free incomes and more information, you can refer to the Income Tax of India website.