How do I set up Vim autoindentation properly for editing Python files?

I use this on my macbook:

" configure expanding of tabs for various file types
au BufRead,BufNewFile *.py set expandtab
au BufRead,BufNewFile *.c set expandtab
au BufRead,BufNewFile *.h set expandtab
au BufRead,BufNewFile Makefile* set noexpandtab

" --------------------------------------------------------------------------------
" configure editor with tabs and nice stuff...
" --------------------------------------------------------------------------------
set expandtab           " enter spaces when tab is pressed
set textwidth=120       " break lines when line length increases
set tabstop=4           " use 4 spaces to represent tab
set softtabstop=4
set shiftwidth=4        " number of spaces to use for auto indent
set autoindent          " copy indent from current line when starting a new line

" make backspaces more powerfull
set backspace=indent,eol,start

set ruler                           " show line and column number
syntax on               " syntax highlighting
set showcmd             " show (partial) command in status line

(edited to only show stuff related to indent / tabs)

Ensure you are editing the correct configuration file for VIM. Especially if you are using windows, where the file could be named _vimrc instead of .vimrc as on other platforms.

In vim type

:help vimrc

and check your path to the _vimrc/.vimrc file with

:echo $HOME

:echo $VIM

Make sure you are only using one file. If you want to split your configuration into smaller chunks you can source other files from inside your _vimrc file.

:help source

Combining the solutions proposed by Daren and Thanos we have a good .vimrc file.

-----
" configure expanding of tabs for various file types
au BufRead,BufNewFile *.py set expandtab
au BufRead,BufNewFile *.c set noexpandtab
au BufRead,BufNewFile *.h set noexpandtab
au BufRead,BufNewFile Makefile* set noexpandtab

" --------------------------------------------------------------------------------
" configure editor with tabs and nice stuff...
" --------------------------------------------------------------------------------
set expandtab           " enter spaces when tab is pressed
set textwidth=120       " break lines when line length increases
set tabstop=4           " use 4 spaces to represent tab
set softtabstop=4
set shiftwidth=4        " number of spaces to use for auto indent
set autoindent          " copy indent from current line when starting a new line
set smartindent
set smarttab
set expandtab
set number

" make backspaces more powerfull
set backspace=indent,eol,start

set ruler                           " show line and column number
syntax on               " syntax highlighting
set showcmd             " show (partial) command in status line

for more advanced python editing consider installing the simplefold vim plugin. it allows you do advanced code folding using regular expressions. i use it to fold my class and method definitions for faster editing.