Income Tax Slab for FY 2023-24 & AY 2024-25 (2024)

In India, income tax is calculated using income tax slabs and rates for the applicable financial year (FY) and assessment year (AY). The income tax slab for AY 2023-24 was published as part of the Union Budget 2022-23.

Income Tax Slab

Individual taxpayers must pay income tax based on the slab system into which they fall. Individuals may fall into a different tax bracket depending on their Income. As a result, persons with higher incomes will have to pay more taxes.

The slab system was implemented to keep the country's tax system equitable. The slabs change with each budget announcement.

Income Tax Slab for FY 2023-24 (AY 2024-25)

The following tables show the Revised Income Tax Slabs, not the old tax regime. These new tax slabs in India were presented in the Budget 2023. The table for the new tax regime slabs-

Income Tax Slab for People Between 60 to 80 Years

Income Tax Slab for People More than 80 Years

Below-mentioned is the Senior citizen tax slab in detail-

Tax Slabs for Domestic Companies

• Surcharge applicable for companies-

• 7% of Income tax where total income is more than Rs 1 crore

• 12% of Income tax where total income is more than Rs.10 crores

• 10% of income tax where domestic company opted section 115BAA and 115BAB

• Additional Health & Education Cess Rate - 4%

Income Tax Rate for Partnership Firm or LLP as Per Old/New Regime

Partnership firm or an LLP is taxable at 30%

Note -

• A Surcharge of 12% is levied on incomes above Rs 1 crore.

• Health and Education Cess Rate - 4 %

Income Tax Slab Rate for New Tax Regime

The HUF and Individual tax slab applicable are-

Tax Slab Rate for FY 2022-23 (AY 2023-24), New Tax Regime – Why an Option to Choose is Given?

Under the new regime of taxation, the taxpayers can avail of an optionto opt for one of the following-

• To pay tax at lower rates according to the New regime of taxation on the condition that they refrain from specific exemptions (permissible) and deductions under income tax.
• To continue paying the taxes under the existing income tax rates. The taxpayer can avail of exemptions and rebates by opting into the old regime and paying tax at the existing higher rate.

Conditions for Opting for the New Tax Regime

The taxpayers who have opted for the new regime will tend to forbear some deductions and exemptions that are available in the old regime of taxation.

Some of the common deductions & exemptions not allowed are under the new regime are-

• Leave Travel Allowance
• Conveyance allowance
• House Rent Allowance
• Relocation allowance
• Children education allowance
• Professional tax
• Daily expenses in the course of employment
• Helper allowance
• Deduction under Chapter VI-A deduction (80C,80D, 80E etc.) (Except Section 80CCD(2))
• Standard deduction on salary
• Interest on housing loan (Section 24)
• Other special allowances (Section 10(14))

Common Deductions that are Allowed under New Tax Rate Regime

• Investment in Notified Pension Scheme under section 80CCD(2)
• Conveyance allowance for expenditure incurred for travelling to work
• Depreciation under section 32, except additional depreciation
• Deduction for employment of new employees under section 80JJAA
• Any allowance for travelling for employment or on transfer
• Transport allowance for specially-abled people

Income Tax Slab Old Regime

The old income tax slabs (old regime) and the tax rates for Individuals and HUF below the age of 60 years and NRIs under the old regime:

Surcharge

• Surcharge applicable as per tax rates below in all categories that are afore-mentioned -

• 10% of Income tax if total income is more than Rs.50 lakh

• 15% of Income tax if total income is more than Rs.1 crore

• 25% of Income tax if total income is more than Rs.2 crore

  See Also

  How to Effectively Save Tax With a Salary of 15 LPA in India?

• 37% of Income tax if total income is more than Rs.5 crore

Note - In the Budget for the year 2023, the highest surcharge rate of 37% has been decreased to 25% under the New Tax Regime (Meant to be applicable from April 1st, 2023)

Kinds of Taxable Income Sources in India

Individuals, trusts, businesses, and other entities are all subject to income tax. As a result, there are numerous forms of income that can be taxed in India.

Mentioned below are some of the different types of taxable income in India-

• Business Income
  

Profits earned by businesses are also counted as taxable income. The tax in this category is derived from the presumed or real income that the profession or business may generate. However, it is only done once the permitted deductions have been adjusted.

Different rates apply to individual and corporate business income in the fiscal year 2022-23. Individuals with business income will be taxed in accordance with tax slabs and rates for the fiscal year 2023-24.

• Salary or Pension
  

Taxes are frequently levied on the base salary, allowances, and salary profit in this category. The tax slab also applies to an individual's pension after retirement. The tax slabs rates for FY 2022-23 differ based on the age of the individual earning a salary or pension during the fiscal year.

• Property Income
  

Owning many houses and renting them out is an easy method to supplement your income. In such circ*mstances, however, revenue from house renting is recognized as part of the taxpayer's income. As a result, this income is taxable at the income tax slab rates for the fiscal year 2022-23.

• Capital Gains Income
  

Capital Gains income can be generated by selling assets such as gold, real estate, mutual funds units, stocks, debentures, and so on. It can be characterized as a long-term or short-term capital gain depending on the type of asset and the earnings produced on it over time.

Despite the fact that these earnings are subject to income taxation, the capital gains tax regulations for 2022-23 are separate from the income tax slabs for 2023-24.

• Lottery, Races, and More Income
  

In India, winnings from lotteries, horse races, and other similar activities are taxable. However, under current tax legislation, these profits are taxed separately rather than as part of the income slab rates for the fiscal year 2022-23.

Distinction Between the Old Regime and the New Regime

In the fiscal year 2020-21, a new tax regime was implemented in addition to the existing old tax regime. Taxpayers in FY 2022-23 (AY 2023-24) can select between these income tax regimes and pay tax appropriately.

There are two significant distinctions between India's two income tax regimes:

• To begin with, the new regime of taxation has more tax slabs with lower tax rates than the old regime tax slab. As a result, the tax slabs for FY 2022-23 fluctuate depending on whether you choose the new or old tax regime.
• Second, all of the important deductions and exemptions available under the previous tax regime, such as Section 80C, Section 80D, and so on, are no longer available if you choose the new regime of taxation.

Tax deductions and exclusions enable taxpayers to decrease their tax liability by investing, saving, or spending on specified financial instruments.

Though the income tax slab 2023-24 (AY) is lower than under the previous regime, the new regime of tax provides very few exemptions or deduction choices.

In comparison, the previous tax scheme allowed for up to 70 deductions or exclusions to reduce your taxable income and income tax liability in the fiscal year 2022-23.