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Sumil Yadav· 8 years ago
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What is the difference in tax slabs between US and India?

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Answered on05/12/26

The US and India both use slab-based income tax systems, but the structure works differently. In the US, federal taxes depend on income brackets, and there are also state taxes in many states. India has separate old and new tax regimes with different slab rates and deduction options. The US system generally includes more detailed filing categories and tax credits, while India focuses more on slab rates and deductions under sections like 80C. Another difference is that healthcare and social security taxes are also significant factors in the US. Honestly, tax systems in both countries can feel confusing, which is why many people rely on accountants or tax software.

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Ved Tiwari
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Ved Tiwari is a Chartered Accountant (CA) and finance writer with over 20 years of professional experience in taxation, auditing, financial planning, and business advisory. He is a Fellow Member of the Institute of Chartered Accountants of India (ICAI) — one of the most rigorous professional qualifications in Indian finance — and holds a Bachelor of Commerce (B.Com Honours) from Shri Ram College of Commerce (SRCC), Delhi University. His content covers personal finance, corporate taxation, GST, investment strategy, business compliance, financial planning, and India's evolving regulatory and economic landscape. His work has appeared on platforms including Moneycontrol, The Economic Times Wealth, and CA Club India, where he writes for finance professionals, business owners, and informed readers who need content built on two decades of real-world financial practice — not surface-level commentary. Over 20 years, Ved has advised hundreds of businesses and individual clients on taxation, audit compliance, and financial restructuring. He has handled complex multi-crore audits, represented clients before tax authorities, and guided startups and established firms through India's regulatory environment. He has published 400+ articles on finance and business, spoken at ICAI seminars and industry finance conferences, and is a practising member of the ICAI Western Region chapter. Across all his writing, every figure is verified, every regulatory reference is current, and every recommendation reflects the same professional standard he applies to his clients — because in finance, accuracy is not optional.

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Replying to the question above
Answered on10/13/25

The U.S. uses a progressive federal tax system with rates from 10% to 37%, while India’s rates range from 5% to 30% based on income levels.

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Updated on05/21/26

Here’s a basic picture…

In India if you’re earning less than Rs 2,50,000 you won’t be taxed. This threshold level is $6,200 in USA.

Other than the ‘No Tax’, we have 3 different tax slabs.

· 10 percent for income between Rs 2,50,001 and Rs 5,00,000.

· 20 percent for income between Rs 5,00,001 and Rs 10,00,000.

· 30 percent for income of and above Rs 10,00,001.

In USA, there are 7 tax slabs. AFTER DEDUCTING the ‘No Tax’ amount of $6,200, what is left in the income, here’s how it is taxed:

· 10 percent for the remaining between $0 and $8,925

· 15 percent for the remaining between $8,926 and $35,250

· 25 percent for the remaining between $36,251 and $87,850

· 28 percent for the remaining between $87,851 and $183,250

· 33 percent for the remaining between $183,251 and $398,350

· 35 percent for the remaining between $398,351 and $400,000

· 39.6 percent for anything at and above $400,001

As you can see, the tax charged in USA is much higher than in USA. However, you should also note that social security net in USA is very (very) solid.

Prreeti Radhika Taneja
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