Before you start

PAN
A day count kept against April to March
Records of foreign income and foreign tax paid
A tax residency certificate from your home country for any treaty claim

Step-by-step

1
Get PAN before payroll starts
Employers must report tax deducted at source against a PAN. Without one, withholding jumps to a penal rate recoverable only by filing a return the following year.
OnlineWho: YouWeek 1
2
Count days against April to March
India's financial year runs 1 April to 31 March. Arrivals from calendar-year countries consistently miscount. Arrive after early October and you generally cannot reach 182 days that year.
OnlineWho: You
3
Establish whether you are RNOR
RNOR applies if you were non-resident in nine of the preceding ten years, or present in India 729 days or fewer over the preceding seven. Nearly every fresh arrival qualifies, and while RNOR, foreign-source income is generally outside Indian tax.
OnlineWho: You, with an adviser in year one
4
Model both regimes on your own numbers
The new regime has lower rates and almost no deductions and applies by default. The old regime allows house rent allowance, section 80C and home-loan interest — but Kochi sits outside the higher HRA band, so the exemption is computed at 40% of salary rather than the 50% available in Delhi, Mumbai, Kolkata, Chennai and, from the 2026-27 year, Bengaluru, Hyderabad, Pune and Ahmedabad.
Via employerWho: You
5
Expect a half-yearly professional tax deduction
Kerala levies professional tax through the local municipal body, deducted in half-yearly instalments rather than monthly as in Maharashtra. The amounts are small and slab-based, but it appears on your payslip and surprises people who have compared gross salaries across states.
Via employerWho: Your employer
6
File using Form 16 and the AIS
Your employer issues Form 16 summarising salary and tax deducted. Reconcile against the Annual Information Statement on the e-filing portal, file, and e-verify. Withholding does not remove the filing obligation.
OnlineWho: YouBy 31 July following the financial year

Documents you’ll need

PAN
Form 16 from your employer
Passport with entry and exit stamps for the day count
Annual Information Statement and Form 26AS
Tax residency certificate and Form 10F for treaty claims

Things most newcomers don’t know

Kerala's professional tax is collected half-yearly by the local body, not monthly by the state.

Most states that levy professional tax deduct a small amount every month. Kerala routes it through the municipality or panchayat and collects it in two instalments a year, which is why it appears as an occasional larger deduction rather than a steady one. The sums are trivial, but the wider lesson is that Indian net pay is not comparable across states on gross salary alone — professional tax, house rent allowance rates and rent levels all move together.

Source: Kerala Local Self Government Department

Kochi sits outside the higher house rent allowance band, which quietly favours the new regime.

The old regime's HRA exemption was for two decades capped at 50% of salary in Delhi, Mumbai, Kolkata and Chennai and 40% everywhere else. The Income-tax Rules 2026, notified on 20 March 2026, widened the 50% band to eight cities by adding Bengaluru, Hyderabad, Pune and Ahmedabad from the 2026-27 year — Kochi was not added and stays at 40%. Combined with rents here being well below metro levels, the strongest reason to elect the old regime is much weaker in this city. Advice imported from a Mumbai colleague will reach the wrong answer.

Source: Income-tax Rules 2026 — CBDT notification of 20 March 2026

RNOR is a two-to-three year shelter on foreign income, and nothing announces its end.

While Resident but Not Ordinarily Resident, income arising outside India — foreign salary, overseas rent, foreign interest and gains — is generally outside Indian tax; only Indian-source income is caught. Once you become Ordinarily Resident, worldwide income is taxable and foreign asset reporting begins. Timing a foreign disposal inside the window rather than just after can be worth a great deal, and nobody will remind you.

Source: Income Tax Department — residential status

If you buy property in Kerala there is a one-off state building tax on top of everything else.

Kerala levies a one-time building tax assessed on plinth area under the Kerala Building Tax Act, payable when a new building is completed, plus an annual luxury tax on larger houses. It sits alongside stamp duty, registration fees and municipal property tax, and it is routinely omitted from purchase budgets prepared elsewhere in India. Given that Kerala property is already expensive relative to local incomes, this is a real line item rather than a rounding error.

Source: Kerala Revenue Department — Building Tax

Common mistakes to avoid

Counting days against a calendar year rather than April to March.
Assuming Kochi gets the 50% house rent allowance rate — it does not, even after the 2026 expansion to eight cities.
Letting the new regime apply by default without modelling the old one.
Filing without a PAN, or taking penal withholding for months.
Budgeting a Kerala property purchase without the one-time building tax.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.