Tax regimes for individuals: India

Preferential and special regimes in 21 countries for people who relocate, work for themselves, invest or draw a pension. Conditions, time limits and the legal basis for each.

Regimes: 4

Optional (old) tax regime — opting out of section 202

OpenOther

Deductions for investments, insurance and housing loans are allowed; standard deduction ₹50,000; slabs 5 / 20 / 30 %.

Details

Who: Individuals who opt out of s. 202 (those with business income face limits on switching back).
How it works: Rates 0% to INR 2.5 lakh, 5% to 5 lakh, 20% to 10 lakh, 30% above; standard deduction INR 50,000, rebate up to INR 12,500 for income up to 5 lakh; investment, insurance and housing deductions available; surcharge up to 37% above 5 crore.
How to opt in: Without business income — choose it in each year's return filed by the due date. With business or professional income — opt out by the return due date; the choice continues and can be withdrawn only once.
Limits and risks: Higher rates than s. 202 and surcharge up to 37% above ₹5 crore; worthwhile only with large deductions; with business income, switching back is restricted.
Legal basis: Income-tax Act, 2025, s. 202(2), (4), s. 19(1) Table Sl. No. 2(b), s. 156(1); Finance Act, 2026, First Schedule, Part I-B, Paragraphs A and F
Checked: November 4, 2026

Presumptive taxation of business — section 58, Table Sl. No. 1 (former s. 44AD)

OpenFor the self-employed

Profit is deemed to be 6% of digital and 8% of other turnover; no books or audit needed.

Details

Who: Resident individuals, HUFs and firms (not LLPs) with turnover up to INR 2 crore (3 crore if cash receipts are 5% or less); not for specified professions, commission or agency business.
How it works: Profit deemed at 6% of digital and 8% of other turnover (or actual, if higher), no books required; ordinary rates then apply.
How to opt in: Declare presumptive profit in the annual return; pay the whole advance tax by 15 March.
Limits and risks: Residents only; no expenses can be deducted; declaring a lower profit in any of the next five years bars the scheme for five years and may require books and audit; GST is separate.
Legal basis: Income-tax Act, 2025, s. 58(2) Table Sl. No. 1, s. 58(7)–(8), (11)(a); s. 408(2)
Checked: November 4, 2026

Presumptive taxation of professions — section 58, Table Sl. No. 3 (former s. 44ADA)

OpenFor the self-employed

Profit is deemed to be 50% of gross receipts; no books or audit needed.

Details

Who: Resident individuals and firms (not LLPs) in specified professions (legal, medical, engineering, architecture, accountancy, technical consultancy, etc.) with gross receipts up to INR 50 lakh (75 lakh if cash is 5% or less).
How it works: Profit deemed at 50% of gross receipts (or actual, if higher); ordinary s. 202 or old-regime rates then apply.
How to opt in: Declare presumptive profit in the annual return; pay the whole advance tax by 15 March.
Limits and risks: Residents in listed professions only; receipts up to ₹50 lakh (₹75 lakh if cash ≤ 5%); declaring less than 50% requires books and audit; GST is separate.
Legal basis: Income-tax Act, 2025, s. 58(2) Table Sl. No. 3, s. 58(3), s. 58(11)(b), s. 62(4); s. 408(2)
Checked: November 4, 2026

Resident but not ordinarily resident (RNOR)

OpenFor people relocating

Income earned abroad is not taxed in India (unless from a business controlled from, or a profession set up in, India).

Details

Who: Residents who were non-resident in 9 of the 10 preceding tax years or in India 729 days or less in the 7 preceding years; also certain citizens/PIOs with income over INR 15 lakh (120–181 days) and deemed-resident citizens.
How it works: Taxed on income received or accruing in India; foreign income only if from a business controlled from or a profession set up in India; typically 2–3 years for newcomers.
Duration: While the RNOR tests are met — usually the first 2–3 tax years after arrival.
How to opt in: Automatic under s. 6; state your status as not ordinarily resident in the return.
Limits and risks: Indian-source income is taxed in full; once you become ordinarily resident, worldwide income is taxed and foreign assets must be reported.
Legal basis: Income-tax Act, 2025, s. 6(13), s. 6(7), s. 263(1)(a)
Checked: November 4, 2026

The catalogue describes general conditions. Whether a regime fits you depends on your circumstances and the tax authority's decision.