India

Research notes

India — family-office tax dossier

Last reviewed: 2026-10-15 Tax year: 2026 Reviewer: research agent (Claude), unreviewed by a tax adviser

Summary

India taxes residents and ordinarily residents on worldwide income. Long-term capital gains cost 14.95% all-in (12.5% plus capped surcharge and cess) and dividends up to 35.88% at the slab rate. Newcomers are usually 'not ordinarily resident' for their first two tax years and are not taxed on foreign income kept abroad. There is no inheritance, estate, gift (between relatives) or wealth tax. The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 with the rates carried over. There is no residence route for a non-working foreign investor family except for people of Indian origin (OCI).

US citizens: US citizens pay US tax on top; the India-US treaty gives credits. As RNOR they pay no Indian tax on foreign income kept abroad.

Residence and eligibility

Tax year 1 April-31 March. Resident if present 182 days or more, or 60 days or more in the year plus 365 days or more in the four preceding years (120 days for Indian citizens/persons of Indian origin with Indian income above INR 1.5 million). Indian citizens not taxable elsewhere with Indian income above INR 1.5 million are deemed resident (RNOR). RNOR if non-resident in 9 of 10 preceding years or present 729 days or fewer in the 7 preceding years.

• Overseas Citizen of India (OCI) card (EU, US, OTHER): Only for foreign citizens of Indian origin and their spouses/children; lifelong multiple-entry visa allowing residence.
• Employment, business or entry visas (EU, US, OTHER): No residence-by-investment for passive investors was found; long-term stays need an employment/business purpose or family ties (not researched in detail).

Capital gains

Resident and ordinarily resident (ROR) (standard)

Residents and ordinarily residents (ROR) are taxed on worldwide capital gains. Long-term gains (listed Indian securities held over 12 months; other assets, including foreign shares, over 24 months) are taxed at 12.5% without indexation for transfers from 23 July 2024; Indian listed equity on which securities transaction tax (STT) was paid has an annual exemption of INR 125,000. Short-term gains on STT-paid listed equity are taxed at 20%; other short-term gains at the slab rates up to 30%. Surcharge on long-term gains is capped at 15%, plus 4% health and education cess.

• Exemptions and thresholds: INR 125,000 a year of long-term gains on STT-paid listed equity/equity funds. Reinvestment reliefs for gains reinvested in an Indian residential house (capped at INR 100 million) or specified bonds/funds.
• Important exceptions, statute references and announced changes: Land and buildings acquired before 23 July 2024: choice of 12.5% without or 20% with indexation. Unlisted debentures/bonds: always short-term. From 1 April 2026 the Income-tax Act, 2025 replaces the 1961 Act (PwC refers to the 'New Act'); the rates above are carried over. Buy-backs from 1 April 2026 are taxed as capital gains, with an additional tax for promoters (>10% holders).
• Tax year / confidence / verification: 2026 / medium / partially_verified (checked 2026-10-15)
• JSON numbers: headline 12.5% (0.125); listed domestic 14.95% (0.1495); listed foreign 14.95% (0.1495); private business sale 14.95% (0.1495); local real estate 14.95% (0.1495); foreign real estate 14.95% (0.1495).
• How derived: Long-term 12.5% x 1.15 (surcharge on long-term gains capped at 15%) x 1.04 (cess) = 14.95% for large gains, for all asset classes once held beyond 12 months (Indian listed) or 24 months (foreign shares, unlisted shares, real estate). Short-term gains would cost 20.8% (STT-paid listed equity: 20% x 1.04 with surcharge on such gains capped at 15% -> 23.92%) or up to 39% (30% slab x 1.25 x 1.04).
• Holding period: 12 months for listed Indian securities and equity-oriented funds; 24 months for other assets including foreign listed shares.
• Trader recharacterisation: Frequent trading can be treated as business income taxed at slab rates (up to 39% with surcharge and cess); intent, frequency and holding period decide.
• Foreign assets: RORs are taxed on worldwide gains with credit for foreign tax under treaties (and unilaterally under s.91 of the 1961 Act where no treaty). RNORs (special regime) are not taxed on foreign gains earned and received outside India.

Resident but not ordinarily resident (RNOR) (rnor)

Foreign gains earned and received outside India are not taxed for an RNOR; Indian gains are taxed as for an ROR.

• Tax year / confidence / verification: 2026 / medium / partially_verified (checked 2026-10-15)
• JSON numbers: headline 12.5% (0.125); listed domestic 14.95% (0.1495); listed foreign 0% (0.0); private business sale 14.95% (0.1495); local real estate 14.95% (0.1495); foreign real estate 0% (0.0).
• How derived: Foreign gains 0 if not received in India; Indian assets as standard (14.95%).
• Foreign assets: Keep foreign proceeds outside India; amounts received in India are taxable.

Dividends

Resident and ordinarily resident (ROR) (standard)

Since 1 April 2020 dividends are taxed in the shareholder's hands at slab rates (top 30%). The surcharge on dividend income is capped at 15%, plus 4% cess. Foreign dividends of an ROR are taxed the same way, with credit for foreign tax under the treaty.

• Important exceptions, statute references and announced changes: Surcharge cap of 15% on dividend income (Finance Act 2022) is applied from general knowledge; PwC states the cap for long-term capital gains and listed-equity gains only.
• Tax year / confidence / verification: 2026 / medium / partially_verified (checked 2026-10-15)
• JSON numbers: headline 35.88% (0.3588); domestic 35.88% (0.3588); foreign gross 35.88% (0.3588); foreign tax relief: credit.
• How derived: 30% slab x 1.15 (dividend surcharge cap) x 1.04 cess = 35.88%. Without the cap (25% surcharge under the default regime above INR 50 million) it would be 39%.
• Outbound withholding: Indian companies withhold 20% (plus surcharge and cess) on dividends to non-residents, reducible by treaty; 10% on resident individuals above INR 5,000 (not verified for 2026).
• Treaty network: Comprehensive treaties with most countries including the US and all major EU states, plus eight limited agreements (PwC).
• Holding companies: Domestic companies pay 25.17% (22% optional regime with surcharge and cess) or up to 34.94%; a company structure is not assumed.

Resident but not ordinarily resident (RNOR) (rnor)

Foreign dividends earned and received outside India are not taxed for an RNOR; Indian dividends taxed at slab rates as standard.

• Tax year / confidence / verification: 2026 / medium / partially_verified (checked 2026-10-15)
• JSON numbers: headline 35.88% (0.3588); domestic 35.88% (0.3588); foreign gross 0% (0.0); foreign tax relief: exemption.
• How derived: Foreign dividends 0 when received abroad; domestic as standard.

Inheritance and gifts to children

Resident and ordinarily resident (ROR) (standard)

India has no inheritance or estate tax (estate duty abolished 1985) and no gift tax on the donor. Gifts received by an individual are taxable income of the recipient above INR 50,000 a year, but gifts from relatives (including lineal descendants and ascendants) and amounts received under a will or by inheritance are exempt.

• Tax year / confidence / verification: 2026 / high / partially_verified (checked 2026-10-15)
• JSON numbers: basis none, children fully_exempt, scope worldwide, exemption 0 INR, brackets (marginal): none; other transfer costs 0% (0.0); deemed disposal 0% (0).
• Gifts: No gift tax; gifts from relatives (children, parents, spouse, siblings) and inheritances are excluded from the recipient's income. Stamp duty applies to gifts of Indian immovable property (state rates, often reduced for family members; not verified). (same as inheritance: True; tax-free after years: None)
• Foreign assets: No tax.
• Residence/domicile rules: Not applicable. Heirs inherit the deceased's cost for later capital gains.
• Business relief covers listed shares: False

Resident but not ordinarily resident (RNOR) (rnor)

Same as the standard regime.

Wealth tax

Resident and ordinarily resident (ROR) (standard)

No wealth tax (Wealth-tax Act abolished from FY 2015/16).

• Tax year / confidence / verification: 2026 / high / partially_verified (checked 2026-10-15)
• JSON type: none
• Property tax (not a wealth tax): Municipal property tax set by each city, generally low and linked to local values. Stamp duty on property purchases set by states (roughly 5%-7%; not verified).

Resident but not ordinarily resident (RNOR) (rnor)

Same as the standard regime.

Special regimes

Resident but not ordinarily resident (RNOR) (rnor)

Newcomers who are resident but not ordinarily resident are taxed only on Indian income and on income received in India; foreign income earned and received abroad is not taxed.

• Eligible citizenships: EU, US, OTHER
• Eligibility: Resident in the year but non-resident in 9 of the 10 preceding years, or present 729 days or fewer in the 7 preceding years. A family arriving after years abroad and staying full time is usually RNOR for its first two tax years.
• Duration (years): 2
• Requires qualifying activity: False

Company taxation (kept separate from personal tax)

Headline CIT rate: 25.17% (0.2517). Domestic companies can opt for 22% plus 10% surcharge and 4% cess (25.17%), without most incentives; otherwise 25% (turnover up to INR 4 billion) or 30% plus surcharge and cess (up to 34.94%). Foreign company branches 35% plus surcharge and cess. MAT changes under the Finance Act, 2026 from tax year 2026/27. Special zones/regimes: GIFT City International Financial Services Centre (IFSC) and Special Economic Zones with concessions (not researched).

Cost of living notes

Not researched in this pass (no quickly verifiable sources).

Open questions

• Only PwC was opened; the Income-tax Act, 2025 text and its section numbering were not read.
• RNOR duration of two years assumes full-time presence from arrival; earlier visits to India shorten it.
• (standard.dividends) Dividend surcharge cap of 15% not confirmed in an opened source.

Sources

• India - Individual - Other taxes (PwC Worldwide Tax Summaries, professional): https://taxsummaries.pwc.com/india/individual/other-taxes
• India - Individual - Taxes on personal income (PwC Worldwide Tax Summaries, professional): https://taxsummaries.pwc.com/india/individual/taxes-on-personal-income
• India - Individual - Income determination (PwC Worldwide Tax Summaries, professional): https://taxsummaries.pwc.com/india/individual/income-determination
• India - Individual - Foreign tax relief and tax treaties (PwC Worldwide Tax Summaries, professional): https://taxsummaries.pwc.com/india/individual/foreign-tax-relief-and-tax-treaties
• India - Individual - Residence (PwC Worldwide Tax Summaries, professional): https://taxsummaries.pwc.com/india/individual/residence
• India - Corporate - Taxes on corporate income (PwC Worldwide Tax Summaries, professional): https://taxsummaries.pwc.com/india/corporate/taxes-on-corporate-income

Change log

• 2026-10-15: initial research.