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Know how India’s tax rates for FY 2025-26 compare with those of other G-20 countries, covering personal income tax rates, allowing you to understand global tax trends and India’s position in international fiscal policies.
The prevailing highest income tax rate in India is 39 per cent under the new tax regime, which is lower than 54.8 per cent in Canada, 45 per cent in France, and 45 per cent in China, among other countries.
The Union Budget 2025-26 has removed the tax liability from the middle class earning up to Rs 12 lakh apart from easing decent burden from others. With this, India’s prevailing personal tax rates are now below those prevailing in various G-20 countries like China, France, Germany, Italy. Here are the personal tax rates in various countries of the world:
According to the latest data from RSM India, an arm of the multinational tax consulting firm RSM International, the prevailing personal tax rate in India is 39 per cent under the new tax regime and 42.74 per cent under old regime. It is lower than the 54.8 per cent tax rate in Canada, 45 per cent in France, 45 per cent in China, 45 per cent in Germany, 55.95 per cent in Japan.
| Country | Personal Tax Rate |
|---|---|
| Argentina | 35% |
| Australia | 47% |
| Brazil | 27.5% |
| Canada | 54.8% |
| China | 45% |
| France | 45% plus surtax and social charge |
| Germany | 45% plus surcharge |
| India | 39.00% (Individuals opting for old regime: 42.74%) |
| Indonesia | 35% |
| Italy | 47.23% |
| Japan | 55.95% |
| Mexico | 35% |
| Russia | 22% |
| Saudi Arabia | 0% |
| South Africa | 45% |
| South Korea | 49.5% |
Importantly, these rates are the maximum marginal rates and inclusive of provincial or local taxes, including surcharge and cess, as may be applicable to resident individuals in respective countries.
In India, these rates would apply to the highest income brackets, including surcharge and cess. Lower income brackets under the old regime would have lower rates, starting from around 5 per cent or 10 per cent. The exact rate depends on the specific income bracket and the deductions applicable.
Income Tax Slabs In India After Budget 2025 (Applicable from April 1, 2025)
New Tax Regime:
| Total Income (Rs.) | Tax Rate |
|---|---|
| Up to 4,00,000 | Nil |
| 4,00,001 to 8,00,000 | 5% |
| 8,00,001 to 12,00,000 | 10% |
| 12,00,001 to 16,00,000 | 15% |
| 16,00,001 to 20,00,000 | 20% |
| 20,00,001 to 24,00,000 | 25% |
| Above 24,00,000 | 30% |
The Union Budget 2025-26 has made the new income tax regime further attractive by making annual income up to Rs 12 lakh tax-free and revamping slabs. Taxpayers who have plain salary income are most likely to go for this regime.
Old Tax Regime:
| Total Income (Rs.) | Tax Rate |
|---|---|
| Up to 2,50,000 | Nil |
| 2,50,001 to 5,00,000 | 5% |
| 5,00,001 to 10,00,000 | 20% |
| Above 10,00,000 | 30% |
It is important to note that on annual incomes above Rs 50 lakh, surcharge is alo applicable, apart from health and education cess of 4 per cent. The surcharge rates are the following:
Surcharge rate in India (both regimes)
| Total Income (Rs.) | Surcharge |
|---|---|
| 50,00,001 to 1,00,00,000 | 10% |
| 1,00,00,001 to 2,00,00,000 | 15% |
| 2,00,00,001 to 5,00,00,000 | 25% |
| Above 5,00,00,000 (old income only) | 37% |
The G-20 economies comprising of 19 countries, the EU and the African Union, account for almost 85% of the global GDP, 75% of the global trade, 2/3rd of the world population and approximately 60% of the world land area. India held the Presidency of the G-20 from December 1, 2022 to November 30, 2023.
