Payments from Abroad Tax Calculator FY 2025-26 | New Tax Regime
If you earn money abroad—whether salary from the USA, freelance income from Upwork, or consulting fees from Europe—you need to pay tax in India. But how much? As per Finance Act, 2025, all foreign income earned by Indian residents is fully taxable in India. This includes YouTube ad revenue, AdSense earnings, international salary, and freelance payments. The tax you pay depends on your total income and which tax regime you choose. For FY 2025-26, the New Tax Regime offers clearer slab rates and lower taxes than before. This calculator shows you exactly how much tax you owe on foreign income under the official government slabs.
Example: Rahul earns $120,000 (roughly ₹1 crore) salary from a USA company as a resident Indian. After applying the New Tax Regime slabs, surcharge, and cess, he owes approximately ₹29 lakh in tax. His net in-hand: ₹71 lakh.
Coverage
This payments from abroad tax calculator is for:
What's NOT covered here:
Key Deductions & Benefits Explained
Standard Deduction Rules (Salary Only)
Good news: If you earn salary abroad, you get an automatic ₹75,000 deduction. You don't need receipts or proof.
• Applies to: Salary income only (W-2 employment, fixed salary contracts from employers) • Does NOT apply to: Freelance income, business income, rental income, consulting fees • How it works: Automatically reduces your taxable income by ₹75,000 • Example: Earn ₹50 lakh salary → Taxable income = ₹49,25,000
Surcharge Rates (Income Above ₹50 Lakh)
Surcharge is extra tax on top of your income tax. It applies when your taxable income exceeds ₹50 lakh.
Official Surcharge Rates (FY 2025-26):
• Up to ₹50 lakh: 0% surcharge (no extra tax) • ₹50 lakh to ₹1 crore: 10% surcharge on income tax • ₹1 crore to ₹2 crore: 15% surcharge on income tax • ₹2 crore to ₹5 crore: 25% surcharge on income tax • ₹5 crore and above: 37% surcharge on income tax
Important: Surcharge is calculated on income tax only, not on the full income. Plus, 4% Health & Education Cess applies on (income tax + surcharge).
Tax Rates Explained Clearly
New Tax Regime Slabs FY 2025-26 – Official Rates
According to the Budget 2025 and Income Tax Department guidelines, here are the official slab rates for FY 2025-26:
1. Your foreign income is added to any other income (salary, interest, etc.) 2. This total taxable income is then taxed at slab rates 3. There's no special flat rate for foreign income—it's treated as regular income 4. Tax is calculated progressively based on income brackets 5. Surcharge applies if your total income exceeds ₹50 lakhs 6. Health & Education Cess of 4% applies on top
These slabs are the ONLY ones for FY 2025-26. Verified with official rules on incometaxindia.gov.in.
Income Tax Slabs (New Regime FY 2025-26)
| Income Range | Tax Rate | ||
| --- | --- | ||
| ₹0 – ₹4,00,000 | 0% | ||
| ₹4,00,001 – ₹8,00,000 | 5% | ||
| ₹8,00,001 – ₹12,00,000 | 10% | ||
| ₹12,00,001 – ₹16,00,000 | 15% | ||
| ₹16,00,001 – ₹20,00,000 | 20% | ||
| ₹20,00,001 – ₹24,00,000 | 25% | ||
| Above ₹24,00,000 | 30% |
Example: If your taxable foreign income is ₹1 crore (₹1,00,00,000), you'd pay: • ₹0 on first ₹4 lakh = ₹0 • 5% on next ₹4 lakh = ₹20,000 • 10% on next ₹4 lakh = ₹40,000 • 15% on next ₹4 lakh = ₹60,000 • 20% on next ₹4 lakh = ₹80,000 • 25% on next ₹4 lakh = ₹100,000 • 30% on remaining ₹76 lakh = ₹22,80,000 • Base Income Tax = ₹25,80,000 (before surcharge & cess)
Surcharge and Cess Explained
Who Pays Tax on Foreign Income? (Resident vs NRI)
Residents and NRIs have DIFFERENT tax rules. Here's the official breakdown:
| Aspect | Resident Individual | Non-Resident Indian | ||
| --- | --- | --- | ||
| Global income taxable? | Yes. All worldwide income is taxable. | No. Only India-source income is taxable. | ||
| Foreign salary taxable? | Yes, fully taxable in India. | Only if received/accrued in India. | ||
| Section 87A rebate? | Yes, if income ≤ ₹12 lakh (capped ₹60K). | No rebate applies. | ||
| Surcharge rules? | Apply at ₹50L+ | Apply at ₹50L+ | ||
| ITR form? | ITR-2 + Schedule FSI/TR | ITR-2 / ITR-3 + Schedule FSI/TR | ||
| Foreign Tax Credit? | Yes, under Rule 128 (Form 67). | Limited, specific conditions apply. |
Source: As per Income Tax Department guidelines and Finance Act, 2025.
Step-by-Step Tax Calculation: ₹1 Crore Foreign Salary Example
Let's calculate the exact tax liability on ₹1 crore annual foreign salary for a Resident Individual in FY 2025-26. This example shows how each deduction, tax slab, surcharge, and cess is applied.
Step 1 – Gross Foreign Income Annual salary earned = ₹1,00,00,000
Step 2 – Apply Standard Deduction Standard deduction on salary (Salary Only) = ₹75,000 Calculation: ₹1,00,00,000 − ₹75,000 = ₹99,25,000 (Taxable Income)
Step 3 – Calculate Income Tax Under New Regime Slabs
Now we apply the New Regime slab rates progressively to your taxable income of ₹99,25,000:
| Income Bracket | Amount in This Bracket | Tax Rate | Tax Payable | ||
| --- | --- | --- | --- | ||
| ₹0 to ₹4,00,000 | ₹4,00,000 | 0% | ₹0 | ||
| ₹4,00,000 to ₹8,00,000 | ₹4,00,000 | 5% | ₹20,000 | ||
| ₹8,00,000 to ₹12,00,000 | ₹4,00,000 | 10% | ₹40,000 | ||
| ₹12,00,000 to ₹16,00,000 | ₹4,00,000 | 15% | ₹60,000 | ||
| ₹16,00,000 to ₹20,00,000 | ₹4,00,000 | 20% | ₹80,000 | ||
| ₹20,00,000 to ₹24,00,000 | ₹4,00,000 | 25% | ₹100,000 | ||
| ₹24,00,000 to ₹99,25,000 | ₹75,25,000 | 30% | ₹22,57,500 | ||
| TOTAL | ₹99,25,000 | ₹25,57,500 |
Result: Base Income Tax = ₹25,57,500
Step 4 – Check for Section 87A Rebate Section 87A rebate applies only to residents with income ≤ ₹12 lakh. Your income: ₹99,25,000 (exceeds ₹12 lakh limit) Result: No rebate applies. Base tax remains = ₹25,57,500
Step 5 – Apply Surcharge Your income ₹99,25,000 falls in the ₹50L–₹1Cr bracket = 10% surcharge applies Surcharge = ₹25,57,500 × 10% = ₹2,55,750
Step 6 – Calculate Health & Education Cess @ 4% Health & Education Cess applies to (Base Tax + Surcharge) Cess = (₹25,57,500 + ₹2,55,750) × 4% = ₹1,12,250
Step 7 – Final Tax Liability Summary
| Tax Component | Amount | ||
| --- | --- | ||
| Base Income Tax | ₹25,57,500 | ||
| Surcharge (10%) | ₹2,55,750 | ||
| Health & Education Cess (4%) | ₹1,12,250 | ||
| Total Tax Payable | ₹29,25,500 |
Net Take-Home: ₹1,00,00,000 − ₹29,25,500 = ₹70,74,500 Effective Tax Rate: 29.26%
This means out of every ₹100 earned, you pay approximately ₹29.26 in taxes and take home ₹70.74.
Example Calculation
ITR Filing for Foreign Income (ITR-2 + Schedule FSI/TR)
According to Income Tax Department guidelines, if you earn foreign income, you must file ITR-2 with Schedule FSI/TR (Foreign Source Income under New Tax Regime).
What You Need to File:
1. ITR Form: ITR-2 (mandatory for residents earning foreign income)
2. Schedule: Schedule FSI/TR (Foreign Source Income under New Tax Regime)
3. Documentation: • Bank statements showing foreign income receipt • Currency conversion records (RBI exchange rate on receipt date) • Withholding tax certificates (TDS/withholding deducted by foreign payer) • Form 67 (only if claiming Foreign Tax Credit under Rule 128)
Key Sections Referenced:
• Section 5: Scope of income tax (defines what's taxable) • Section 115BAC: New Tax Regime (official slab structure) • Rule 128: Foreign Tax Credit (if you paid taxes abroad)
Filing Deadline & Penalties:
• Due Date: 31st July (for previous financial year) • Late Penalty: ₹10,000 if filed after 31st July • Document Retention: Keep all records for 3 years (tax audit defense) • Prosecution: Legal action if filed beyond statute of limitations
Compliance Checklist Before Filing:
✓ Convert foreign currency to INR using RBI Telegraphic Transfer (TT) Selling Rate on receipt date ✓ Maintain bank statements and conversion proof ✓ Collect withholding tax certificates from foreign payer ✓ If claiming Foreign Tax Credit: Prepare Form 67 and tax documents ✓ File ITR-2 with Schedule FSI/TR (NOT ITR-1, NOT ITR-4) ✓ File before 31st July ✓ Keep all documents for 3 years ✓ Do NOT mix New Regime with Old Regime
Disclaimer
Disclaimer: This calculator provides tax estimates based on official government rules for FY 2025-26 under the New Tax Regime. All slabs, rates, and rules are verified with:
Your actual tax liability may vary depending on:
This is NOT professional tax advice. For complex situations, unusual income sources, or if you're unsure about any aspect:
Filing is mandatory if your total income exceeds the basic exemption limit (₹2.5 lakh). Late filing incurs penalties and may trigger prosecution. File your ITR-2 with Schedule FSI/TR before 31st July to avoid penalties and legal action.
Frequently Asked Questions
Is YouTube and AdSense income taxable in India?+
Yes, absolutely. All income from YouTube, AdSense, Upwork, Fiverr and other foreign platforms is fully taxable in India for residents. For NRIs, only India-source income is taxable. You must report this income in your ITR even if received through foreign accounts.
How is foreign income taxed?+
For Residents: Foreign-source income is added to your total income and taxed at the New Regime slab rates (0% up to ₹4L, then 5%, 10%, 15%, 20%, 25%, 30%). Surcharge applies if total income exceeds ₹50 lakhs. For NRIs: Only India-source foreign income is taxable. No Section 87A rebate applies. Tax rates are similar but NRI-specific rules apply.
What exchange rate should I use?+
Use the RBI Telegraphic Transfer (TT) Selling Rate on the date you received the income or when it was credited to your account. Maintain detailed documentation of: (1) Date of receipt (2) Amount in foreign currency (3) RBI exchange rate used (4) Converted INR amount. Tax authorities accept RBI rate for that specific date if you maintain records.
Do I need to report small amounts?+
Yes, all foreign platform earnings must be reported in ITR, even amounts as small as ₹100. There is no minimum threshold for foreign income reporting. If your total income from all sources exceeds ₹2.5 lakh, ITR filing is mandatory.
Is there TDS on foreign payments?+
Yes. Most foreign platforms like YouTube (30%), AdSense (30%), Upwork (20%) deduct withholding tax at source. This withholding is automatically credited to your ITR account by the Income Tax Department. The withheld amount adjusts against your final Indian tax liability.
Can I claim foreign tax credit?+
Yes. If you paid taxes in a foreign country on the same income, you may claim Foreign Tax Credit under Rule 128 (Residents only). Limit: FTC ≤ Indian tax × (foreign income ÷ total income). You must file Form 67 along with your ITR to claim FTC. This avoids double taxation on the same income.
Does Section 87A rebate apply to foreign income?+
Yes, but only for Residents with total income ≤ ₹12 lakhs. If your total income (including foreign income) is ≤ ₹12 lakhs, you get full tax rebate capped at ₹60,000. If your total income exceeds ₹12 lakhs, no Section 87A rebate applies, even if foreign income alone is small. NRIs: No Section 87A rebate applies under any circumstance.
What about surcharge on foreign income?+
Surcharge applies if total income (including foreign income) exceeds ₹50 lakhs. Surcharge rates: 10% (₹50L–1Cr) → 15% (₹1Cr–2Cr) → 25% (₹2Cr–5Cr) → 37% (₹5Cr+). Plus 4% Health & Education Cess on (Income Tax + Surcharge). Marginal relief prevents tax from exceeding income increase at threshold levels.