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Guide 2024
Find everything you need for confident contracting and working in India: labour law, taxation, employment compliance, payroll, benefits, and more.
India
The Republic of India is a country in South Asia, and the most populous democracy in the world; it has a rich history and culture, with beautiful architecture and rapidly improving public transport. India has quite a high level of pollution, especially in the cities, and the level of food hygiene isn’t generally up to par with other countries. While Indian people are very warm and friendly, local attitudes towards personal space can be quite intrusive for foreigners who are not used to it.
India has a quickly growing economy, and job opportunities are widespread; the cost of living is also generally much lower than in other parts of the world. However, the work-life balance is not that great, with most people working a lot of overtime.
- Capital: New Delhi
- Spoken Languages: Hindi
- Currency: Indian Rupee (INR)
- Minimum monthly wage: There is no minimum salary set by law in India
Entry Visa
Most foreign nationals need a visa to enter India, although nationals from certain countries may receive their visa on arrival without prior application.
Work Permit / Residence Permit
In order for a foreigner to secure a job in India and get a permit, they must be a very highly skilled and/or qualified professional earning a salary of at least US$25,000 a year, and there must not be any qualified Indian nationals available for that job.
Applications for an Employment Visa can be done online, but a physical copy of the application along with all the required documents must be brought personally to the nearest Indian embassy. After the application is approved and the Visa received, the individual may enter India and start work.
Social Security Registration
Foreigners working in India need to be registered for the Employee Provident Fund – this is done by the employer.
Working Hours
A standard working week in India is 8 hours a day/48 hours a week due to a 6-day working week.
Public Holidays
Due to its size and cultural diversity, there are only 3 official national holidays that are observed across the country. Other holidays are fully dependent on the region.
- Republic Day, 26 Jan
- Independence Day, 15 Aug
- Gandhi Jayanti, 02 Oct
- Christmas Day, 25 Dec
Vacation Allowance
Employees in India are entitled to 1 day of leave per 20 days of service, which amounts to 15 working days per year.
Sick Leave
Employees in India are entitled to up to 15 days of sick leave per year; a medical certificate is necessary if the leave exceeds 2-3 days.
Maternity / Paternity leave
- Maternity: 26 weeks; 8 weeks before the expected delivery date and at least 6 weeks after the birth
- Paternity: None; however, some companies opt to provide certain amounts of paternity leave.
Termination & Severance
Upon employment termination, employees may be entitled to a severance payment of approximately 1-2 weeks’ pay per year of service; for executives, this may be increased to a month’s pay depending on the employment agreement.
Notice Period
The standard notice period in India is one month; it is also possible to receive the month’s wages in lieu of the period if agreed upon with the employer.
Social Security
Indian social security regulations apply to companies with more than 20 employees; for smaller companies, contributions are not mandatory but the establishment may voluntarily contribute as well.
| Category | Employer Contribution (%) | Employee Contribution (%) |
| Employee Provident Fund (EPF) | 12% | 12,33% |
The maximum monthly insurable earnings for the EPF are INR 15,000.
Pension
Pension in India is covered by social security contributions, and individuals are eligible if they made at least 10 year’ worth of contributions.
Taxation in India
The Indian fiscal year runs from 1 April to 31 March the following year.
Tax Rates
There are two different options for calculating income tax in India; the Old Regime, where the rates are higher but the employee can claim more deductions before assessing the taxable income, and the New Regime, which decreases the amount of things that can be deducted before income assessment, but has lower tax rates. Employees can choose which regime they would rather use.
The following progressive rates apply for 2024 (New Regime):
| Taxable Income (INR) | Rate – New Regime (%) |
| 0 – 300,000 | 0% |
| 300,001 – 600,000 | 5% |
| 600,001 – 900,000 | 10% |
| 900,001 – 1,200,000 | 15% |
| 1,200,001 – 1,500,000 | 20% |
| 1,500,001 + | 30% |
The old tax regime differentiates between three age cohorts of tax-paying individuals.
The following progressive rates apply for 2024 (Old Regime: Individuals below 60 years and HUF):
| Taxable Income (INR) | Rate – Old Regime (%) |
| 0 – 250,000 | 0% |
| 250,001 – 500,000 | 5% |
| 500,001 – 1,000,000 | 20% |
| 1,000,000+ | 30% |
The following progressive rates apply for 2024 (Old Regime: Individuals aged between 60 years and 80 years):
| Taxable Income (INR) | Rate – Old Regime (%) |
| 0 – 300,000 | 0% |
| 300,001 – 500,000 | 5% |
| 500,001 – 1,000,000 | 20% |
| 1,000,000+ | 30% |
The following progressive rates apply for 2024 (Old Regime: Individuals above 80 years):
| Taxable Income (INR) | Rate – Old Regime (%) |
| 0 – 500,000 | 0% |
| 500,001 – 1,000,000 | 20% |
| 1,000,000+ | 30% |
Tax Returns
Tax returns must be filed electronically by by 31 July of the year immediately following the previous fiscal year.
Double Taxation
India has tax treaties with multiple other countries, which can reduce payable tax on certain incomes.
Health Insurance
Government Health Insurance schemes in India are generally only available to lower-income groups. Foreigners living and working in India are better off getting private health insurance.
Cost of Living
The cost of living in India is quite low. The estimated monthly cost for a single person is around INR 35,000– 40,000, with 10,000 – 15,000 going to rent, depending on the location.
How We Can Help
We provide a full set of services in India allowing corporate clients, recruitment agencies and professional contractors to operate in an optimal manner while ensuring that all local employment obligations are taken care of.
Access Financial offers the following solutions in India:
- Employed/EOR Solution
- Self-Employed Solution
If you would like to discuss how Access Financial can help in India, please contact us.
Disclaimer
We have prepared this as a guide only; it does not form part of an offer. Please request illustrations based on your specific case from one of our solution managers.
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