Introduction
Understanding income tax rates in different countries helps individuals, startups, and global businesses plan better. Whether you’re considering relocation, working abroad, or benchmarking India’s tax system — comparing global tax rates gives useful perspective. In this blog, we simplify 2025 tax slabs in India and 10 other major countries.
Why Global Tax Rate Comparison Matters
- NRIs want to optimise tax liability between countries.
- Indian startups expanding overseas need to assess effective tax burdens.
- Remote workers & freelancers may become resident or taxable in multiple nations.
- High-net-worth individuals plan based on net-of-tax returns.
👉 Pro Tip: Always check for Double Taxation Avoidance Agreements (DTAA) before making a move.
Global Income Tax Rates (2025): Quick Comparison
| Country | Tax System Type | Max Tax Rate (Individual) | Exemption Threshold |
|---|---|---|---|
| India | Slab-based (Progressive) | 30% (excluding surcharge) | ₹3 lakh (new regime) |
| US | Progressive | 37% | $14,600 (Single) |
| UK | Progressive | 45% | £12,570 |
| UAE | Territorial (no PIT) | 0% | N/A |
| Singapore | Progressive | 24% | SGD 20,000 |
| Australia | Progressive | 45% | AUD 18,200 |
| Germany | Progressive | 45% | €11,604 |
| Japan | Progressive | 45% (plus local tax) | ¥480,000 |
| Canada | Progressive | 33% (Fed) + Prov. Taxes | CAD 15,705 |
| New Zealand | Progressive | 39% | NZD 14,000 |
| China | Progressive | 45% | RMB 60,000 |
Source: Respective government websites and tax authorities (e.g., gov.uk, irs.gov, mof.gov.cn)
How India Compares in 2025
Under New Regime (FY 2024–25)
| Income Slab | Tax Rate (New Regime) |
|---|---|
| ₹0 – ₹3,00,000 | 0% |
| ₹3,00,001 – ₹6,00,000 | 5% |
| ₹6,00,001 – ₹9,00,000 | 10% |
| ₹9,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
- No deductions like 80C, 80D allowed under this regime.
- Optional old regime still exists with deductions.
➡️ Legal Reference: Notification No. 05/2023 dt. 14.02.2023 under Section 115BAC.
Countries with No Personal Income Tax
A few countries don’t tax personal income at all:
- UAE (except 9% corporate tax)
- Qatar
- Bahamas
- Bermuda
- Kuwait
But remember:
These countries may levy VAT, corporate taxes, or residency-linked levies.
Expert View: Don’t Compare Tax Rates in Isolation
“Look at total tax + social security + health surcharge + cost of living. A 0% tax country may still have indirect burdens. India, despite its 30% top rate, offers generous exemptions under the old regime and tax-free agricultural income.”
— Efiletax Compliance Team
Practical Tips Before Relocation or Earning Abroad
- Check residential status under Section 6 of Income Tax Act
- Review DTAA provisions with your destination country
- Use Form 10F & TRC to claim relief
- Report global income properly in Indian ITR (if resident)
- Beware of FEMA & Black Money Act compliance
India vs. UAE vs. US: A Simple Income Example
| Detail | India (New) | UAE | US (Single) |
|---|---|---|---|
| Gross Income (₹25 lakh) | ₹25,00,000 | ₹25,00,000 | $30,000 (₹25L) |
| Tax Payable | ~₹4.6 lakh | ₹0 | ~$3,400 |
| Effective Tax Rate | ~18.4% | 0% | ~11% |
| Social Security/Other | ₹0 | ₹0 | ~$2,300 extra |
Closing Thoughts
Every country structures taxes based on local economics. India’s tax rates remain moderate when seen with deductions and slabs. For NRIs, global freelancers, or startups eyeing global expansion — understanding income tax rates in different countries is key to avoiding surprises and planning smarter.
Need help with NRI tax planning, DTAA, or global income disclosure?
👉 Talk to Efiletax Experts Today
FAQs
Q1. Is income earned abroad taxable in India?
A: Yes, if you’re an Indian resident under Section 6 of the Income Tax Act, global income is taxable.
Q2. Which countries have the lowest income tax?
A: UAE, Qatar, and a few others levy no personal income tax.
Q3. Can I use DTAA to avoid double taxation?
A: Yes, India has DTAA with 90+ countries. You can claim relief using Form 10F, TRC, and disclose it in your ITR.
Q4. Are Indian tax rates higher than other countries?
A: India has a moderate slab system. Effective rate depends on exemptions, unlike flat-tax countries.
Summary:
Income tax rates in different countries vary by system. India’s top slab is 30%, while UAE has no personal income tax. Compare 2025 global tax rates here.