Why India?

India is the biggest democracy in the world and if measured by population the second biggest country. The buying power of India is the fourth biggest in the world – with a strongly increasing tendency. The middle class is growing in the next few years by 300 to 400 million people who will all spend money on services and goods. The Indian government put a lot of effort into supporting the economy and promoting India as a business location. Over the last couple of year the complicated tax system has been completely modified and more simplifications are being planned. Furthermore the Indian government offers “Special Economic Zones” which offer various facilities and tax remissions to mainly export orientated businesses. With these zones India would like to strengthen companies focussing on production and export and bring more foreign investment capital to India. Today India is number one for business outsourcing”. Various big companies have moved part of their business activities to India and profit from low salaries and a legion of very educated and motivated employees. India is especially interesting for companies who would like to invest their money in the country as well as moving a part of the business to India.

Taxation System in India

In last 10-15 years, Indian taxation system has undergone tremendous reforms. The tax rates have been rationalized and tax laws have been simplified resulting in better compliance, ease of tax payment and better enforcement. The process of rationalization of tax administration is ongoing in India.

Tax levied by Central Government

• direct taxes:
  • tax on corporate income
  • capital gains tax
  • personal income tax
• indirect taxes:
  • excise duty
  • custom duty
  • service tax
  • securities transaction tax

Taxes levied by State Governments and local bodies

• sales tax / VAT
• other taxes

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