# Best City in India for a Tech Company in 2026: Four Hubs Compared

> Source: https://krystal7.com/insights/tech-hubs-india-bengaluru-hyderabad-pune-gurugram-comparison
> Publisher: Krystal7 Consultants (Krystal7 Innovations Private Limited), Gurugram, India
> Author: CA Nandini
> Published: 09 Mar 2026; updated 24 Oct 2026
> Summary: Compare Bengaluru, Hyderabad, Pune and Gurugram for a foreign tech subsidiary, from Pune's 20 percent GCC capital subsidy to state lease duty.

*Written by CA Nandini Hasija, Krystal7 Consultants. Last updated 23 October 2026.*

## AI Overview Summary

- No city wins on every test. Bengaluru, Hyderabad, Pune and Gurugram sit in four states, so the subsidiary's professional tax, shops and establishments law, lease stamp duty and incentives all follow the state.
- Pune is in Zone 1 of Maharashtra's GCC Policy 2025. A qualifying GCC there gets a 20 percent capital subsidy and a 10 percent lease rental subsidy for five years, both capped.
- Maharashtra's IT and ITES Policy 2023 exempts 50 to 100 percent of lease stamp duty for IT units in IT parks, by zone. IT units also get essential service status for 24x7 work.
- Every office follows its state's shops and establishments law, by registration or, for small Maharashtra offices, intimation. The OSH Code adds a central registration once an establishment employs ten or more workers.
- Article 276 of the Constitution caps professional tax at INR 2,500 per person per year. Karnataka, Maharashtra and Telangana levy it on salaries. We did not verify Haryana, so check it before the first payroll.

**There is no single best city in India for a tech company. Bengaluru (Karnataka) has the deepest senior engineering market. Hyderabad (Telangana) offers fast approvals, and Pune (Maharashtra) the most detailed published GCC incentives. Gurugram (Haryana) sits next to Delhi and its airport. The state decides professional tax, shops and establishments registration, lease stamp duty and incentives. Pune's GCC Policy 2025 gives a 20 percent capital subsidy.**

This page compares the four cities for a foreign tech subsidiary. It covers talent, office costs, state IT and GCC policies, professional tax, shops and establishments law, lease stamp duty, connectivity and a decision table. We use official state documents for every incentive, and we describe costs qualitatively where no official figure exists.

## What is the best city in India for a foreign tech company?

The best city depends on the work the subsidiary will do and who it must hire. In our experience, Bengaluru suits product engineering and Hyderabad large captive centres. Pune suits engineering and automotive software at lower cost. Gurugram suits sales, finance and client facing teams near Delhi. Each city sits in a different state, with different rules.

We start every location brief with three questions for the parent:

1. **What skills are scarce for you?** A team of 30 senior platform engineers is a different search from 300 support analysts.
2. **Who will the team work with?** Proximity to customers, government or the parent's flight routes can matter more than salary.
3. **Will you claim incentives?** State GCC and IT policies pay real money, but only on investment and headcount thresholds you must hold.

The rest of this page gives the facts behind each answer. Where a state publishes an official figure, we cite it. Where no official figure exists, we describe the position and leave the number out.

## How do the four cities compare at a glance?

The table below sets the legal and practical frame for each city. The state column drives most compliance. The last column shows the official policy text we cite, as checked on 23 Oct 2026.

| City | State | Registrar of Companies | Shops and establishments law | Professional tax on salaries | State policy text we cite |
|---|---|---|---|---|---|
| Bengaluru | Karnataka | ROC Bengaluru | Karnataka Shops and Commercial Establishments Act, 1961 | Yes, under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976 | Karnataka Industrial Policy 2025-30 operative guidelines; no IT or GCC policy could be read |
| Hyderabad | Telangana | ROC Hyderabad | Telangana Shops and Establishments Act, 1988 | Yes, under the Telangana Tax on Professions, Trades, Callings and Employments Act, 1987 (the Andhra Pradesh Act as adapted) | Invest Telangana portal; next ICT and GCC policies stated as under way |
| Pune | Maharashtra | ROC Pune | Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 | Yes, under the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 | IT and ITES Policy 2023; GCC Policy 2025 |
| Gurugram | Haryana | ROC Delhi (covers Delhi and Haryana) | Punjab Shops and Commercial Establishments Act, 1958, as applied in Haryana | Not verified; see the professional tax section | IT and ESDM Policy, 2017, as amended; incentive amounts not read |

Sources: state policy pages cited below; shops and establishments Act names as in our [working hours and OSH Code guide](/insights/working-hours-overtime-leave-osh-code). We state no professional tax slabs, because each state changes them by notification. Read the current schedule before payroll.

The registrar matters only for filings and inspections. It does not change the Companies Act rules. Our guide to [changing the registered office](/insights/change-registered-office-indian-company) explains what a later move between states costs.

## Which city has the best tech talent pool?

All four cities have large tech workforces, but they differ in depth and seniority. In our experience, Bengaluru has the largest pool of senior product and platform engineers. Hyderabad has large captive centres and a big graduate supply. Pune is strong in engineering and automotive software. Gurugram is strong in sales, finance and consulting roles.

Official, city level workforce figures are rare. Telangana publishes the most. The [Invest Telangana IT and GCC page](https://invest.telangana.gov.in/sectors/it-and-gcc/), checked on 23 Oct 2026, states these figures:

1. **IT and ITES workforce.** More than 9,39,000 people, from the state's latest consolidated IT employment data.
2. **GCCs.** More than 500 GCCs, as at a September 2026 ecosystem snapshot.
3. **New GCCs.** More than 197 new GCC establishments and expansions from 2024 to mid 2026.
4. **Graduates.** More than 1,10,000 engineering graduates a year from more than 200 institutions.

These are the state's own figures, and the page does not give a source for every one. We found no comparable official figures for Bengaluru, Pune or Gurugram on the state pages we could read, so we do not quote any.

For a first hire plan, we look at four things that matter more than headline counts:

1. **Seniority mix.** A city with many graduates may still be thin for staff engineers or engineering managers.
2. **Competing employers.** A cluster of similar GCCs raises salaries and attrition for the same skills.
3. **Commute.** Teams in all four cities choose employers partly by travel time, so the micro market matters.
4. **Hybrid policy.** A parent that requires office attendance narrows the pool to people near the office.

## How do office costs compare across the four cities?

Office rents vary more within a city than between the four cities. A Grade A tower in a prime business district can cost far more than a building on the city's edge. We do not quote rents here, because no official source publishes them and broker figures change every quarter.

Here is how we approach office cost for a new subsidiary:

1. **Start with a managed or coworking space.** It needs no fit out and gives a registered office address. It suits a first team of up to 50 people.
2. **Get two broker quotes in the same quarter.** Compare the same building grade and the same micro market.
3. **Price the whole occupancy cost.** Rent, maintenance charges, parking, power back up, fit out, security deposit and stamp duty all count.
4. **Check the state incentive first.** Maharashtra's GCC Policy 2025 pays 10 percent of rent in Pune for five years to qualifying GCCs, up to a cap, which changes the comparison.
5. **Model the lock in.** Office leases often carry a lock in period, so exit cost is part of the price.

A managed office also simplifies the shops and establishments registration and the GST registration address. Our [GST registration guide for foreign companies](/insights/gst-registration-for-foreign-companies-in-india) lists the address proofs the officer asks for.

## What do state IT and GCC policies offer?

State policies differ widely. Maharashtra publishes the most detailed current incentives for Pune, in its IT and ITES Policy 2023 and its GCC Policy 2025. Telangana offers single window approvals and says new ICT and GCC policies are under way. Karnataka's Industrial Policy 2025-30 guidelines do not mention IT, and we could not read a current Karnataka IT or GCC policy. Haryana's IT and ESDM Policy dates from 2017, and we could not read its incentive amounts.

Maharashtra (Pune) comes first. The [IT and ITES Policy 2023](https://midc.maharashtra.gov.in/wp-content/uploads/2026/07/IT-and-ITES-Policy-2023.pdf) is GR No. ITP-2021/P.K.170/Udyog-2 of 27 Jun 2023. Paragraph 4.1.3 puts the Pune Metropolitan Region municipal corporation areas in Zone 1. Its main incentives for IT units are in paragraph 3.1.

| Incentive for an IT or ITES unit | Zone 1 (Mumbai and Pune regions) | Elsewhere in Maharashtra | Paragraph |
|---|---|---|---|
| Stamp duty exemption on leases, mortgages and similar deeds | 75% in a public IT park; 50% in a private IT park | 100% in public and private IT parks | 3.1.1 |
| Stamp duty exemption for SEZ and STPI units | 100% | 100% | 3.1.1(d) |
| Electricity duty exemption, new unit | 10 years in a registered park | 15 years for units that meet the paragraph's criteria | 3.1.3 |
| Power tariff | Industrial rate | Industrial rate | 3.1.7 |
| Property tax | Residential equivalent rate | Residential equivalent rate | 3.1.9 |
| Hours of operation | Essential service status, 24x7x365 | Same | 3.1.11 |
| Location | Any zone, including residential and green zones | Same | 3.1.10 |

Source: Maharashtra IT and ITES Policy 2023, as published on the MIDC policy page, read 23 Oct 2026. SEZ and STPI units get a permanent electricity duty exemption under paragraph 3.1.3. The published text is in Marathi, so we describe it in our words.

Maharashtra added a dedicated [GCC Policy 2025](https://midc.maharashtra.gov.in/wp-content/uploads/2026/07/Maharashtra-Global-Capability-Centre-GCC-Policy-%E2%80%93-2025.pdf), GR No. GCC-2025/Q.No.114/Industry-2 of 3 Nov 2025. The Cabinet approved it on 30 Sep 2025, and it runs to the end of financial year 2029-30.

| Feature | Small GCC | Medium GCC | Large GCC | Mega GCC |
|---|---|---|---|---|
| Fixed capital investment (INR crore) | 50 to 100 | 100 to 250 | 250 to 500 | 500 to 750 |
| Employees | 100 to 250 | 250 to 500 | 500 to 750 | 750 to 1,000 |
| Capital subsidy (20% of eligible investment), cap in INR crore | 10 | 20 | 50 | 100 |
| Lease rental subsidy in Zone 1, five years | 10% of rent, cap INR 1 crore | 10% of rent, cap INR 2 crore | 10% of rent, cap INR 3 crore | 10% of rent, cap INR 4 crore |

Source: Maharashtra GCC Policy 2025, paragraphs 3.3 and 3.4. A GCC qualifies for a category on fixed capital or on employment. The capital subsidy is the lower of 20 percent and the cap, paid in five equal instalments. The Mega figure is a ceiling within a customised package that needs State level committee approval. An ultra mega category applies above INR 750 crore and 1,000 employees. It gets a customised package with no fixed capital subsidy cap and the same INR 4 crore lease rental cap as Mega.

The GCC policy adds more support. Paragraph 3.4.2 pays a Zone 1 salary subsidy of 40 percent on the part of an eligible employee's monthly salary above INR 1,00,000. It sets a cap of INR 50,000 per employee, but the Marathi text we could read ties that cap to "each year", and the English annexure was not in the text we could read. Check the period before you model it. The subsidy runs three years, released 30, 30 and 40 percent. It covers up to 100 employees a year and has an annual cap of INR 5 crore.

Paragraph 3.4.6 exempts electricity duty for ten years. Paragraph 3.3 makes a financial year's incentives inadmissible if the required headcount is not met in any month of that year. The minimum must be reached within two years of commercial operation.

Outside Zone 1, the policy pays better rates: a 20 percent lease rental subsidy, a 50 percent salary subsidy and INR 2 per unit on electricity, against 10 percent, 40 percent and INR 1 per unit in Zone 1.

For Telangana (Hyderabad), the [Invest Telangana portal](https://invest.telangana.gov.in/) describes TG iPASS, a single window with self certification. It says approvals are deemed granted if no decision issues within 15 days for mega projects or 30 days for others. It also lists next generation policies for GCCs, data centres, ICT and electronics as under way. Its [policies page](https://invest.telangana.gov.in/policies/) listed no ICT policy on 23 Oct 2026.

The Telangana startup portal's [policies page](https://startup.telangana.gov.in/government-policies/) links a scanned file called the 2nd ICT Policy, which it describes as released in April 2016 while the file name says 2021. We could not read the scan, so we state no Telangana ICT incentives. Ask the Telangana IT department for the Government Order in force before you count on any.

For Karnataka (Bengaluru), the [operative guidelines](https://investkarnataka.co.in/wp-content/uploads/2026/04/Karnataka.pdf) for Karnataka's Industrial Policy 2025-30, approved on 10 Apr 2026, apply from 8 Feb 2025. They do not mention IT or ITES. Section 9.4.1 refers to Bengaluru Urban in Zone 3, but the incentive table at section 9.3.1 was not legible enough for us to state any incentive for a Bengaluru unit. We also could not read a current Karnataka IT policy or GCC policy on the official pages that open. Ask the Karnataka IT and BT department for the Government Order in force before you count on incentives for Bengaluru Urban.

For Haryana (Gurugram), the [Haryana IT department](https://haryanait.gov.in/it-esdm-policy/) lists the IT and ESDM Policy, 2017, and a Haryana State Data Centre Policy 2022. The [notification of 12 Feb 2019](https://cdnbbsr.s3waas.gov.in/s35352696a9ca3397beb79f116f3a33991/uploads/2020/07/2020071497.pdf) makes further partial amendments to the 2017 policy, which it says was issued under a notification of 5 Nov 2018. The amendments we could read concern land reservation for social infrastructure, trainers, an IP facilitation cell at Gurugram, inspections and power supply. We could not read any incentive amounts, so we state none and take no view on whether any Gurugram block is excluded. Ask the Haryana IT department for the amended policy before you count on incentives.

In our experience, groups choose Bengaluru and Gurugram for talent and proximity rather than subsidies. We could not read current IT incentives for either state, so confirm them with the state before you count on any.

## How does professional tax differ between the states?

Professional tax is a state tax on employment. Article 276 of the Constitution caps it at INR 2,500 per person per year. Karnataka, Maharashtra and Telangana levy it on salaried employees under their own Acts. The employer deducts it from salary, registers with the state and pays it on the state's due dates, usually monthly. We did not verify from an official source whether Haryana levies it on salaries, so confirm that with the Haryana state tax authorities before the first payroll in Gurugram.

The duties for an employer in a state that levies it are similar:

1. **Employer registration.** The company registers as an employer under the state Act before the first payroll.
2. **Company enrolment.** Some states also enrol the company itself for a fixed annual amount. Check your state's Act.
3. **Monthly deduction.** Payroll deducts the slab amount from each salary above the state threshold.
4. **Payment and returns.** The employer pays by the state's due date and files the state's returns.

Slabs and thresholds change by state notification, so we state none here and read the current schedule before each payroll year. Our [professional tax registration](/services/professional-tax-registration.html) service registers the employer in each state where staff work.

A subsidiary with employees in two states registers in both. A remote employee in Pune of a Bengaluru subsidiary usually triggers Maharashtra registration, because the tax follows where the employee works.

## Which shops and establishments law applies to an office?

The office follows the shops and establishments Act of the state where it sits. Karnataka uses its 1961 Act, Telangana its 1988 Act, Maharashtra its 2017 Act and Haryana the Punjab Act of 1958 as applied in Haryana. These Acts continue alongside the Occupational Safety, Health and Working Conditions Code, 2020.

The OSH Code came into force on 21 Nov 2025 through S.O. 5321(E). It subsumed 13 central laws, according to paragraph 2.7 of the labour ministry's [Annual Report 2025-26](https://www.labour.gov.in/static/uploads/2026/06/4b7ec0e8206aa4860576d6f75b432e97.pdf), but it did not repeal the state shops and establishments Acts. Our batch guide on [working hours under the OSH Code](/insights/working-hours-overtime-leave-osh-code) explains the overlap. So an office can need two registrations:

1. **State registration.** Under the state shops and establishments Act, usually from the first employee. In Maharashtra, the 2017 Act (Mah. LXI of 2017) requires an establishment with ten or more workers to register under section 6, by applying online within 60 days. An establishment with fewer than ten workers gives an intimation under section 7 within 60 days instead, and must register once it reaches ten workers. The Law and Judiciary Department lists a Maharashtra Shops and Establishments (Amendment) Ordinance, 2025, but its page did not load for us. We cannot say whether it changed these thresholds, so check the Act as amended before you file.
2. **Central registration.** Under section 3 of the [OSH Code](https://www.labour.gov.in/static/uploads/2025/07/36fcfa5d8e6b9145e282bf7b950d6c47.pdf), read with the definition of establishment in section 2(1)(v), once ten or more workers are employed. The Code's definition of worker leaves out people employed mainly in a managerial or administrative capacity, so count against that definition.

Some states have exempted IT and ITES establishments from parts of their shops and establishments Acts by order, with conditions on hours, leave and women's safety at night. Check whether your state has such an order in force, and read its conditions before you roster night shifts. Maharashtra grants IT units essential service status for round the clock work under paragraph 3.1.11 of its IT and ITES Policy 2023. We found nothing in the policy text that overrides the Shops and Establishments Act, so keep to that Act and the OSH Code on hours and night work. Our shops and establishments registration service handles the state filing.

## How much stamp duty applies to an office lease?

Each state charges stamp duty on a lease or a leave and licence agreement under its own stamp law. The duty depends on the rent, the deposit and the term. Section 17(1)(d) of the Registration Act, 1908 also requires registration of a lease from year to year, for a term exceeding one year, or reserving a yearly rent. Maharashtra discounts the duty for IT units in parks.

The practical points for a foreign subsidiary are these:

| Point | What to check | Why it matters |
|---|---|---|
| Rate and base | The state stamp schedule for leases and licences: rent, deposit, premium and term | The base differs by state, so the same deal costs different amounts |
| Registration | Section 17(1)(d) of the Registration Act, 1908 for leases from year to year, over one year or reserving a yearly rent; any state rule for licences | An unregistered document that needs registration generally cannot be received as evidence of the lease (section 49) |
| IT concession | Maharashtra IT and ITES Policy 2023, paragraph 3.1.1 | 50% to 100% exemption for IT units in parks, by zone |
| Who pays | The lease or licence terms | The tenant usually pays in practice, but the deed should say so |
| Timing | Stamp before or at execution | Late stamping attracts a penalty under the state stamp law |

Sources: Registration Act, 1908; Maharashtra IT and ITES Policy 2023. We state no stamp duty rates, because each state sets and amends its own schedule. Read the current schedule on the state stamps and registration department site, or ask a local lawyer, before you sign.

We see two mistakes often. The first is signing an 11 month licence and assuming no duty is due. State stamp laws generally charge duty on licences too, even where registration is not compulsory. The second is missing the IT park exemption in Pune because the landlord's park is not registered under the policy. Ask the landlord for the park's registration before you sign.

## How do connectivity and infrastructure compare?

All four cities have metro rail and international air links, but they differ in scale. Bengaluru and Hyderabad each have their own large international airport. Gurugram uses Delhi's Indira Gandhi International Airport, which is close by road. Pune has its own airport with fewer direct international routes, so long haul travel often goes through Mumbai.

For a foreign parent, connectivity has three practical tests:

1. **Board and leadership travel.** How many direct flights reach the parent's head office time zone? Gurugram and Bengaluru usually win here, in our experience.
2. **Government and regulator access.** Gurugram is close to central ministries and RBI's regional office in New Delhi.
3. **Commute inside the city.** Traffic and metro coverage decide which micro market staff will accept.

Power and data connectivity are reliable in established IT parks in all four cities. Maharashtra's IT and ITES Policy 2023 also prices IT unit power at the industrial rate under paragraph 3.1.7. For a data centre rather than an office, see our batch guide on [data centre incentives](/insights/data-centre-india-incentives-tax-holiday).

## Does the city change the company's tax or FEMA position?

No. Income tax, FEMA, the Companies Act and GST rates are central. A Bengaluru subsidiary and a Gurugram subsidiary pay the same income tax and file the same FEMA returns. The city changes only state levies, state labour registrations, incentives and the GST registration state.

The central rules that do not change with the city:

1. **Income tax.** The same corporate rate and transfer pricing rules apply. Our guide to [GCC setup in India](/insights/global-capability-centre-gcc-india-setup) covers the safe harbour and cost plus model.
2. **FEMA.** The same FC-GPR reporting within 30 days of allotment applies everywhere.
3. **GST.** The rates are national, but each state needs its own registration. Section 25 of the CGST Act, 2017 treats each state registration as a distinct person, so supplies between your own offices in two states carry GST. Our guide to [GST on cross charges](/insights/gst-on-cross-charges-related-party-services) explains the valuation.
4. **PF and ESI.** These are central. The EPF wage ceiling rose to INR 25,000 from 17 Sep 2026 under S.O. 5109(E). Our page on [PF and ESI for foreign owned companies](/insights/pf-esi-foreign-owned-company-international-workers) gives the detail.

A second city later means a second GST registration, a second shops and establishments registration and possibly a second professional tax registration. Plan the first office with that in mind.

## How should a foreign tech subsidiary choose between the four?

Choose on talent and work type first, then check state costs and incentives. If incentives decide the case and you will hold the headcount, look at Pune. Of the four, only Maharashtra's GCC Policy 2025 gave current, published GCC subsidies we could verify. Otherwise, follow the talent your first hires need.

| If your first priority is | Our usual starting point | Why | Watch out for |
|---|---|---|---|
| Senior product and platform engineers | Bengaluru | Deepest senior market, in our experience | Competition for the same profiles and commute times |
| A large captive centre scaling to hundreds of staff | Hyderabad | Large campuses, single window approvals, a big graduate supply per state figures | We could not read a current ICT policy, so confirm incentives before you count on them |
| Published incentives for a GCC | Pune | Maharashtra GCC Policy 2025 and IT and ITES Policy 2023 | Headcount must hold every month, or that year's incentives lapse |
| Sales, finance, consulting or government facing teams | Gurugram | Close to Delhi, its airport and central ministries | We could not read current incentive amounts, so confirm them before you assume any |
| Lowest first year cost | Any, in a managed office | Fit out and deposit dominate year one | Lock in and exit cost in the managed office contract |

This table is our view from location work for foreign subsidiaries. It is not a ranking based on official data.

## What changed in 2026

| Item | Old position | New position | Date | Instrument |
|---|---|---|---|---|
| Central labour law for offices | Factories Act and other central labour laws; state shops and establishments Acts | OSH Code in force; state shops and establishments Acts continue | 21 Nov 2025 | S.O. 5321(E) |
| Central rules under the four labour codes | Draft rules | Central rules notified | 8 May 2026 | G.S.R. 342(E) to 345(E) |
| Maharashtra GCC incentives | IT and ITES Policy 2023 only | Dedicated GCC Policy 2025 with capital, rent and salary subsidies | 3 Nov 2025 | GR No. GCC-2025/Q.No.114/Industry-2 |
| Karnataka industrial incentives | Industrial Policy 2020-25 | Industrial Policy 2025-30; operative guidelines approved, with no mention of IT or ITES | 8 Feb 2025; 10 Apr 2026 | Government letter CI 123 SPI 2024 |
| Telangana ICT and GCC policies | A 2nd ICT Policy file on the startup portal, scanned and unreadable | Next generation policies stated as under way; no ICT policy on the policies page | As at 23 Oct 2026 | Invest Telangana portal |
| EPF wage ceiling | INR 15,000 | INR 25,000 | 17 Sep 2026 | S.O. 5109(E) |

## What has happened since this page was first published?

We first published this page on 9 Mar 2026. These events followed:

1. **10 Apr 2026.** Karnataka approved the operative guidelines for its Industrial Policy 2025-30.
2. **8 May 2026.** The Centre notified its rules under the four labour codes, including the OSH (Central) Rules as G.S.R. 345(E).
3. **17 Sep 2026.** The EPF wage ceiling rose to INR 25,000 under S.O. 5109(E).
4. **September 2026.** Invest Telangana's GCC snapshot counted more than 500 GCCs in the state.

## Worked example

**Scenario 1: a small GCC in Pune.** A UK software group sets up PuneTech Private Limited as a GCC in a Zone 1 private IT park. It invests INR 80 crore in eligible fixed capital. It hires 200 employees within two years. That makes it a small GCC under paragraph 3.3 of the GCC Policy 2025. Its annual rent is INR 8 crore.

| Incentive | Computation | Annual amount (INR crore) | Total (INR crore) |
|---|---|---|---|
| Capital subsidy | 20% × 80 = 16, capped at 10; five equal instalments | 2.00 for five years | 10.00 |
| Lease rental subsidy | 10% × 8 = 0.80, below the INR 1 crore cap; five years, cap read as annual | 0.80 for five years | 4.00 |
| Total before salary subsidy and power support | | | 14.00 |

The lease row reads the INR 1 crore cap as an annual cap. The policy text we read does not say whether the cap is annual or covers the five years. If it covers the five years, the lease subsidy is INR 1.00 crore in all, and the total before salary subsidy and power support falls to INR 11.00 crore.

Suppose headcount falls to 90 in one month of year three, below the small GCC minimum of 100. Paragraph 3.3 then makes that year's incentives inadmissible. On the annual reading, that one month costs INR 2.80 crore of capital and rent subsidy.

**Scenario 2: lease stamp duty in the same park.** Assume the stamp duty on PuneTech's lease deed, before any exemption, is INR 20,00,000. Paragraph 3.1.1(c) of the IT and ITES Policy 2023 exempts 50 percent for a Zone 1 private park. PuneTech pays INR 10,00,000. In a public IT park in Zone 1, the exemption is 75 percent, so it would pay INR 5,00,000.

## Common mistakes

1. **Choosing the city before the talent plan.** Fix: list the first 20 roles and their seniority before shortlisting cities.
2. **Counting incentives you cannot hold.** Maharashtra makes a year's GCC incentives inadmissible if headcount dips in any month. Fix: set the claim category below your realistic minimum headcount.
3. **Forgetting professional tax for remote staff.** The tax follows where the employee works. Fix: register in each state where staff sit before the first payroll there.
4. **Registering only under the state Act.** The OSH Code adds a central registration at ten workers. Fix: diarise the OSH registration when headcount reaches ten.
5. **Assuming an 11 month licence needs no stamp duty.** Licences still attract duty. Fix: stamp the licence at execution under the state schedule.
6. **Missing the IT park exemption.** The Pune exemption needs a registered IT park. Fix: get the park's registration from the landlord before signing.
7. **Rostering night shifts without the state exemption.** Fix: read the current state IT exemption order and the OSH Code conditions first.
8. **Using one GST registration for two states.** Each state office needs its own. Fix: register in the second state before the office starts supplying.

## Checklist

1. List the first 20 roles, their seniority and their required skills.
2. Shortlist cities by talent fit, travel needs and proximity to customers.
3. Read the current state IT and GCC policy for each shortlisted city.
4. Compute any incentive after caps, and test it against your realistic minimum headcount.
5. Get two office quotes in the same quarter for the same grade and micro market.
6. Check the stamp duty, registration and any IT park exemption on the lease or licence.
7. Incorporate the subsidiary with the registered office in the chosen state.
8. Register for GST, professional tax and shops and establishments in that state.
9. Register under the OSH Code once the office reaches ten workers.
10. Repeat the state registrations before hiring staff in any second state.

Email business@krystal7.com with your first hiring plan and we will map the state registrations and incentives for each shortlisted city.

## Key terms

- **Professional tax**: A state tax on professions, trades, callings and employments, allowed by Article 276 of the Constitution and capped at INR 2,500 per person per year. Employers deduct it from salaries and pay it to the state under the state's own Act, such as Karnataka's 1976 Act. (https://krystal7.com/glossary#professional-tax)
- **Shops and Establishments Act**: A state law that regulates shops and commercial establishments, including offices, through registration or intimation, hours, holidays, leave and conditions of work. Each state has its own Act, and these continue alongside the Occupational Safety, Health and Working Conditions Code, 2020. (https://krystal7.com/glossary#shops-and-establishments-act)
- **Global Capability Centre (GCC)**: An Indian entity owned by a foreign group that performs work for the group, such as engineering, finance operations, analytics or research. Indian law has no separate licence for it. It is set up as a company, branch or LLP and follows the normal company, tax, FEMA and labour laws. (https://krystal7.com/glossary#global-capability-centre)
- **Zone 1 (Maharashtra)**: The part of Maharashtra covering the Mumbai and Pune Metropolitan Regions. The IT and ITES Policy 2023 limits it to their municipal corporation areas. Under the GCC Policy 2025, Zone 1 units get lower rent, salary and power subsidies than units elsewhere in the state. (https://krystal7.com/glossary#zone-1-maharashtra)
- **Leave and licence agreement**: A licence to use premises without creating a lease or tenancy, common for Indian offices. Each state's stamp law sets the stamp duty on it, and the Registration Act, 1908 governs registration. In Maharashtra, the Maharashtra Rent Control Act, 1999 also governs these agreements. (https://krystal7.com/glossary#leave-and-licence-agreement)
- **TG iPASS**: Telangana's single window industrial approval system with self certification. Invest Telangana says approvals are deemed granted if no decision issues within 15 days for mega projects or 30 days for other projects. (https://krystal7.com/glossary#tg-ipass)

## Frequently Asked Questions

### Which is the best city in India for a foreign tech company?
No single city is best. In our experience, Bengaluru suits senior product engineering, Hyderabad large captive centres, Pune engineering work with published GCC incentives, and Gurugram teams that need Delhi access. The state of each city decides professional tax, shops and establishments law, lease duty and incentives.

### Is Bengaluru or Hyderabad better for a GCC?
It depends on the roles. Bengaluru has a deep senior engineering market in our experience. Hyderabad offers single window approvals through TG iPASS and states it has more than 500 GCCs as at September 2026. We could not read a current Telangana ICT policy, so confirm incentives before counting on them.

### What incentives does Maharashtra give a GCC in Pune?
Maharashtra's GCC Policy 2025, GR of 3 Nov 2025, gives a 20 percent capital subsidy capped by GCC size and a 10 percent lease rental subsidy, also capped, for five years in Zone 1. It adds a salary subsidy and a ten year electricity duty exemption. Pune is in Zone 1.

### Is Pune in Zone 1 under Maharashtra's IT policy?
Yes. Paragraph 4.1.3 of the Maharashtra IT and ITES Policy 2023 defines Zone 1 as the municipal corporation areas of the Mumbai and Pune Metropolitan Regions. The GCC Policy 2025 also puts the Pune Metropolitan Region in Zone 1. Check a site outside a municipal corporation area against the policy text.

### Does Gurugram offer state IT incentives?
Haryana's IT department lists the IT and ESDM Policy, 2017, with a notification of 5 Nov 2018 and a partial amendment of 12 Feb 2019, and a State Data Centre Policy 2022. We could not read the incentive amounts. Most groups choose Gurugram for Delhi access and talent rather than for subsidies.

### Which states levy professional tax on salaries?
Karnataka, Maharashtra and Telangana levy professional tax on salaried employees under their own Acts. Article 276 of the Constitution caps it at INR 2,500 per person per year. The employer registers, deducts it from salary and pays it to the state, usually monthly. We did not verify Haryana, so check it before the first payroll.

### Do I need a shops and establishments registration for an office?
Yes, in some form. Each state's shops and establishments Act covers a commercial establishment, including an office. Karnataka uses its 1961 Act, Telangana its 1988 Act, Maharashtra its 2017 Act and Haryana the Punjab Act of 1958. In Maharashtra, an office with fewer than ten workers gives an intimation instead of registering. The OSH Code adds a central registration at ten workers.

### Does the OSH Code replace the shops and establishments Acts?
No. The Occupational Safety, Health and Working Conditions Code, 2020, in force from 21 Nov 2025 under S.O. 5321(E), subsumed 13 central laws. State shops and establishments Acts continue, so an office follows both its state Act and the Code.

### Is stamp duty payable on an office leave and licence agreement?
Yes. Each state's stamp law charges duty on leases and licences, based on rent, deposit and term. Section 17(1)(d) of the Registration Act, 1908 requires registration of leases from year to year, over one year or reserving a yearly rent. Maharashtra exempts 50 to 100 percent of the duty on leases for IT units in parks.

### Does the city change the subsidiary's income tax?
No. Income tax, transfer pricing, FEMA reporting and GST rates are central, so they are the same in all four cities. The city changes state levies, labour registrations, incentives and the GST registration state. A second state office needs its own GST registration.

### Can a Bengaluru subsidiary hire staff in Pune?
Yes. The subsidiary registers for professional tax in Maharashtra for those staff and checks whether the Pune workplace needs a shops and establishments registration. If the Pune office supplies services, it also needs a Maharashtra GST registration under section 25 of the CGST Act, 2017.

### Which city has the best connectivity for a foreign parent?
Bengaluru and Hyderabad each have their own large international airport. Gurugram is close to Delhi's Indira Gandhi International Airport and to central ministries. Pune has fewer direct international routes, so long haul travel often goes through Mumbai. Choose by the parent's travel patterns.

### How do Maharashtra's GCC incentives get withdrawn?
Paragraph 3.3 of the Maharashtra GCC Policy 2025 requires the employment target to be maintained throughout the year. If headcount falls below the target in any month of a claim year, that year's incentives are not admissible. The minimum employment must be reached within two years of commercial operation.

### Should a new subsidiary start in a coworking space?
Often, yes. A managed or coworking office needs no fit out and gives a registered office address. It suits a first team of up to 50 people. Check that the provider's address works for GST, shops and establishments and bank account opening before you sign.

## Sources

- Maharashtra Industrial Development Corporation, Industrial policies and incentives page, read 23 Oct 2026, https://midc.maharashtra.gov.in/en/investors/industrial-policies-and-incentives/
- Government of Maharashtra, Industries, Energy and Labour Department, IT and ITES Policy 2023, GR No. ITP-2021/P.K.170/Udyog-2, 27 Jun 2023, https://midc.maharashtra.gov.in/wp-content/uploads/2026/07/IT-and-ITES-Policy-2023.pdf
- Government of Maharashtra, Industries, Energy, Labour and Mining Department, Maharashtra Global Capability Centre Policy 2025, GR No. GCC-2025/Q.No.114/Industry-2, 3 Nov 2025, https://midc.maharashtra.gov.in/wp-content/uploads/2026/07/Maharashtra-Global-Capability-Centre-GCC-Policy-%E2%80%93-2025.pdf
- Government of Telangana, Invest Telangana home page (TG iPASS), read 23 Oct 2026, https://invest.telangana.gov.in/
- Government of Telangana, Invest Telangana IT and GCC sector page, read 23 Oct 2026, https://invest.telangana.gov.in/sectors/it-and-gcc/
- Government of Telangana, Invest Telangana policies page, read 23 Oct 2026, https://invest.telangana.gov.in/policies/
- Government of Telangana, Startup Telangana government policies page (2nd ICT Policy file, scanned and not readable), read 23 Oct 2026, https://startup.telangana.gov.in/government-policies/
- Government of Karnataka, Invest Karnataka home page, read 23 Oct 2026, https://investkarnataka.co.in/
- Government of Karnataka, Department of Industries and Commerce, Operative Guidelines under Industrial Policy 2025-30, approved 10 Apr 2026, https://investkarnataka.co.in/wp-content/uploads/2026/04/Karnataka.pdf
- Government of Haryana, Department of Information Technology, Electronics and Communication, policies, read 23 Oct 2026, https://haryanait.gov.in/
- Government of Haryana, IT and ESDM Policy page, read 23 Oct 2026, https://haryanait.gov.in/it-esdm-policy/
- Government of Haryana, Notification amending the IT and ESDM Policy, 2017, 12 Feb 2019, https://cdnbbsr.s3waas.gov.in/s35352696a9ca3397beb79f116f3a33991/uploads/2020/07/2020071497.pdf
- Government of Maharashtra, The Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017 (Mah. LXI of 2017), India Code, https://www.indiacode.nic.in/bitstream/123456789/19710/1/shops_and_establishments.pdf
- Government of Maharashtra, Law and Judiciary Department, Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) (Amendment) Ordinance, 2025, listed but not readable on 23 Oct 2026, https://lj.maharashtra.gov.in/en/document/the-maharashtra-shops-and-establishments-regulation-of-employment-and-conditions-of-service-amendment-ordinance-2025/
- Ministry of Labour and Employment, The Occupational Safety, Health and Working Conditions Code, 2020, https://www.labour.gov.in/static/uploads/2025/07/36fcfa5d8e6b9145e282bf7b950d6c47.pdf
- Ministry of Labour and Employment, Annual Report 2025-26, paragraph 2.7 (labour codes in force from 21 Nov 2025; OSH Code subsumes 13 laws), https://www.labour.gov.in/static/uploads/2026/06/4b7ec0e8206aa4860576d6f75b432e97.pdf

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