Before you start

PAN
A day count kept against April-to-March, not the calendar year
Records of foreign income and any foreign tax paid
A tax residency certificate from your home country if you intend to claim treaty relief

Step-by-step

1
Get the PAN before payroll starts
Your employer must report tax deducted at source against a PAN. Without one, withholding jumps to a penal rate that you can only recover by filing a return the following year.
OnlineWho: YouWeek 1
2
Count your days against April to March
India's financial year runs 1 April to 31 March. Arrivals from calendar-year countries consistently miscount and reach the wrong residency conclusion. Arrive after early October and you will usually fall short of 182 days for that year entirely.
OnlineWho: You
3
Work out whether you are RNOR
You are RNOR if you were a non-resident in nine of the preceding ten years, or present in India for 729 days or fewer over the preceding seven. Almost every fresh arrival qualifies. While RNOR, foreign-source income is generally outside Indian tax.
OnlineWho: You, with an adviser in year one
4
Model both regimes before letting the default apply
The new regime has lower rates and almost no deductions and applies unless you elect otherwise. The old regime allows house rent allowance, section 80C investments and home-loan interest. Chandigarh is a 40% house rent allowance city, not one of the 50% metros — the Income-tax Rules 2026 promoted Ahmedabad, Bengaluru, Hyderabad and Pune, and Chandigarh was not on that list.
Via employerWho: You
5
Check whether your employer is registered in Punjab
Punjab levies a monthly state development tax on people liable to income tax, deducted by the employer. Chandigarh UT and Haryana do not. In a metropolitan area where an office in Mohali and an office in Sector 34 are twenty minutes apart, two colleagues on identical salaries can have different deductions. It is a small amount, but it is worth understanding rather than querying.
Via employerWho: You
6
Arrange treaty documents before you need them
Claiming relief under a double taxation avoidance agreement generally requires a tax residency certificate from your home authority plus Form 10F. Obtaining one retrospectively, from abroad, after you have severed the relationship, is considerably harder.
OnlineWho: You

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

Two colleagues twenty minutes apart in the same metro can have different payroll deductions.

Chandigarh UT and Haryana levy no professional tax. Punjab abolished professional tax but introduced a state development tax on income-tax payers, deducted monthly by the employer. So a job in Mohali and a job in Sector 34 are not identical on the payslip even at identical gross salary. The sums are small, but this is the clearest single illustration of the tricity's real character: one labour market, three tax jurisdictions, and nobody flagging the difference when you sign.

Source: Punjab State Development Tax; Chandigarh Administration

Chandigarh is a 40% house rent allowance city, and stayed one in 2026.

For two decades the old regime's HRA exemption was capped at 50% of salary in only Delhi, Mumbai, Kolkata and Chennai. The Income-tax Rules 2026 added Ahmedabad, Bengaluru, Hyderabad and Pune from the 2026-27 year. Chandigarh was not added. Given that rents in the northern sectors are genuinely high by non-metro standards, this is one of the few places where the 40% cap actually bites — model both regimes rather than assuming the default.

Source: Income Tax Department — house rent allowance

RNOR is a two-to-three year window on your foreign income and it is not announced.

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 tip into Ordinarily Resident, worldwide income becomes taxable and foreign asset reporting kicks in. Nobody tells you the date.

Source: Income Tax Department — residential status

The April-to-March year changes the arithmetic of when you move.

Residency is counted per financial year. Someone arriving in November cannot reach 182 days by 31 March and so remains non-resident for that year, with only Indian-source income taxed. Someone arriving in July crosses the line comfortably. Where the move date is flexible this is one of the few genuinely large levers available, and it is invisible to anyone thinking in calendar years.

Source: Income Tax Department — residential status

Common mistakes to avoid

Counting days against a calendar year instead of April to March.
Assuming a Mohali employer and a Chandigarh employer deduct the same state levies — they do not.
Letting the new regime apply by default without modelling the old one.
Assuming Chandigarh got the 50% house rent allowance rate in 2026; it did not.
Filing without a PAN, or taking the penal no-PAN withholding rate for months.

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