Relocating to India: A Practical Guide to Expatriate Tax

Relocating to India for work is exciting, challenging, and full of discovery. But along with the new experiences, many expats quickly realise that India’s tax system works very differently than what they may be used to. The rules are detailed, the paperwork can be demanding, and clarity is not always easy to find.

This guide is designed to make things simple. Think of it as a friendly walk‑through of what really matters when it comes to expat taxation in India—without the jargon, without the overwhelm, and with plenty of practical pointers.

1. Your Residential Status: The First Big Building Block
In India, everything starts with where you were and for how long. Your tax liability depends on the number of days you spend in India during a financial year (1 April to 31 March).

You’ll fall into one of these three categories:

• Non‑Resident (NR)
• Resident but Not Ordinarily Resident (RNOR)
• Resident & Ordinarily Resident (ROR)

Most expats begin as NR or RNOR for at least their first couple of financial years. You move into ROR status only once your stay in India crosses certain thresholds.

Why you should pay attention:

• ROR → India taxes your global income.
• RNOR/NR → Only India‑sourced or India‑received income is taxed.

This single distinction can completely shape your tax story in India.

2. India’s Financial Year & Your Filing Duties
India follows a financial year from 1 April to 31 March. Your tax return (called the ITR) is typically due by 31 July.

During the year, you may encounter:

• TDS (Tax Deducted at Source) on your salary
• Advance tax, if you have additional income
• Self‑assessment tax, if there’s anything left to settle before filing

If you become ROR, you’ll also need to disclose your foreign assets and overseas bank accounts. And regardless of your status, be prepared for documentation—India loves it. Keep your travel history, bank statements, Form 16, Form 26AS, payslips, and anything related to your assignment handy.

3. PAN: Your Tax Identity in India
If you’re earning in India, a PAN (Permanent Account Number) is more or less essential.

You’ll need it for:

• Filing tax returns
• Opening bank accounts
• Completing financial transactions
• Ensuring your employer doesn’t deduct tax at the highest rate

Applying early—ideally before or upon arrival—helps avoid unnecessary complications.

4. What Income Is Taxable in India?
This is where many expats are surprised: If your work relates to India, the income is usually taxable here, even if part of your salary is paid overseas.

Taxable components include:

• Base salary
• Performance incentives and bonuses
• Paid leave during your Indian assignment
• ESOPs
• Perks like company-provided housing, car, education allowance
• Any income tied to services performed in India (even if paid earlier or later)

Some contributions, such as Provident Fund (PF), may offer tax benefits—depending on whether you choose the old or new tax regime.

5. Old vs New Tax Regime: Choosing What Works for You
India gives you two tax regimes:

Old Regime

• More deductions and exemptions
• Higher tax rates
• Useful if you have allowances, PF contributions, or investments that qualify for deductions

New Regime (Default)

• Lower taxes
• Fewer deductions
• Clean and simple

But remember: if you prefer the old regime, you have to opt in—it doesn’t apply automatically.

For expats, the best choice often depends on salary structure and allowances. A quick comparison usually saves money.

6. Double Taxation Avoidance Agreements (DTAA)
India has DTAAs with most major economies. These treaties help ensure you don’t pay tax twice on the same income.

To claim treaty benefits, you’ll normally need:

• A Tax Residency Certificate (TRC)
• Form 10F
• Supporting declarations

Some treaties also offer short-stay exemptions, which can be especially useful for short-term assignees.

7. Provident Fund: Understanding Your Social Security Obligations
If you’re an “International Worker” under Indian PF rules, both you and your employer must contribute 12% each to the Provident Fund—unless your home country has a Social Security Agreement (SSA) with India.

Key things to know:

• Withdrawals follow strict rules
• SSA countries get smoother withdrawal and repatriation procedures
• Forms 15CA/CB are often needed when withdrawing PF funds

Understanding your PF eligibility early makes a big difference.

8. Visa, FRRO Registration & Immigration Compliance
If your visa is valid for over 180 days, you need to register with the FRRO within 14 days of arriving in India.

A quick checklist:

• You can’t freely change employers
• Family members need separate registrations
• Project visas apply to specific industries
• All filings are online—but delays happen, so don’t leave it to the last minute

9. Before You Leave India: The ITCC
If you’re leaving India permanently, you may need an Income Tax Clearance Certificate (ITCC). Think of it as your “all clear” note from the tax department.

It confirms:

• All your tax returns are filed
• You don’t owe any tax
• You’re good to exit the country without pending obligations

Not always mandatory, but strongly advisable.

10. Common Expat Mistakes—and How to Avoid Them

• Misreading residency rules → May trigger global taxation
• Delayed FRRO registration → Leads to penalties
• Weak documentation → Causes avoidable stress during assessments
• Ignoring PF rules → Can delay repatriation
• Forgetting exit compliance → Can complicate departure

A little organisation goes a long way.

11. Setting Yourself Up for a Smooth Assignment

Before Arrival

• Apply for PAN
• Understand DTAA reliefs
• Review your compensation structure
• Check PF/SSA applicability

Upon Arrival

• Register with FRRO
• Share updated info with your employer
• Start building your documentation trail

During the Assignment

• Track your days in India
• Check monthly tax withholding
• Maintain proofs for income and assets

Before Departure

• Calculate final taxes
• File your return
• Secure your ITCC
• Start PF withdrawal planning early

Final Word
India is one of the world’s most dynamic markets—rewarding, fast‑moving, and full of opportunity. And yes, the tax system is layered, but it’s navigable with the right information and proper planning.
A little foresight helps you avoid penalties, optimise taxes, and enjoy your Indian assignment without stress. And if you ever need a hand, Coinmen’s expat tax team is always here to guide you through every step.

To learn more about AGA’s Global Mobility Solutions click here.

About Coinmen Consultants

Coinmen Consultants LLP, is a multidisciplinary advisory firm based in New Delhi, supporting international companies in navigating the complexities of doing business in India. The firm brings together deep expertise across tax and regulatory advisory, corporate finance, financial accounting, transfer pricing, international tax, and corporate secretarial support, delivered through integrated service lines that ensure clients benefit from cross-functional, end to end solutions. 

With a strong focus on cross border business, Coinmen works extensively with European companies entering or expanding in India, providing guidance on market entry strategies, entity structuring, tax planning, funding options, regulatory compliance, and operational challenges. The firm’s European Business Desk acts as a dedicated bridge for international clients, ensuring cultural fluency, clear communication, and seamless coordination between jurisdictions. 

Coinmen is an active member of Chambers of Commerce for Spain, Italy, France, Germany, Brazil, and Japan in India, and collaborates frequently with foreign accounting, consulting, and law firms on transaction-led engagements—strengthening sectoral insight and compliance rigor for clients. 

As a proud member of Alliott Global Alliance, Coinmen leverages a worldwide network spanning 260+ cities in over 100 countries, enabling the firm to support global mandates in transfer pricing, accounting, tax, and audits while navigating the cultural and regulatory nuances of cross border business. 

At its core, Coinmen is driven by a simple ethos: helping international businesses succeed in India by combining technical expertise with practical, on the ground experience. The firm embraces the complexities of international expansion and works alongside clients as a long term partner—supporting them through the opportunities and challenges of building sustainable operations in one of the world’s most dynamic markets.