Visual Studio, Python not auto-indenting

http://stevedower.id.au/blog/smart-indentation-for-python/

However, the most common (and default) mode is “Smart.” Unlike the other two modes, which are built into the editor, smart indentation is provided by a language service (which are also responsible for providing syntax highlighting and completions). Because they are targeted to a specific language, they can help the programmer by automatically adding and removing extra indentation in ways that make sense.

Tools -> Options -> Text editor -> Python -> Tabs and set it to Smart