Income Tax Slab 2023-24: A Comprehensive Look at the New Slabs

2023-02-01

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Understanding the complex system of income tax is a daunting task, and taxpayers need to comprehend the nuances of income tax slabs. The determination of income tax slabs becomes a crucial component of financial policy as governments endeavour to achieve a balance between maintaining fiscal discipline and offering vital services. The blog explains topics such as income tax slab for AY 2024-25, tax regimes, taxable incomes, and many more in further sections.

Table Of Content:

0 1

What is an Income Tax Slab?

0 2

Income Tax Slab Rates For FY 2023-24

0 3

Comparison of Tax Rates

0 4

Surcharge on Income Tax for FY 23-24

0 5

Steps to Calculate Income Tax

0 6

Forms You Should Know About

0 7

What is Taxable Income?

0 8

How to Calculate Taxable Income?

0 9

How To Select the Tax Regime

Checking which tax slab you fall Into?

Glossary

FAQs

What is an Income Tax Slab?

Taxpayers are classified into income tax slabs according to their income range. In the tax slab system used for income tax in India, rates are applied to the income of taxpayers. Individuals with higher incomes pay taxes at higher income tax slabs proportionate to their increased income under this progressive taxation scheme.

Through income tax slabs in India, the government hopes to provide a fair taxation structure for all citizens. For this reason, the government announces changes to the Union Budget and frequently updates the tax slabs.

Now that you know what income tax slabs are, let's take you through the different slabs under the old and new tax regimes for a better understanding.

Income Tax Slab Rates For FY 2021-22, 2022-23, 2023-24

Listed below are numerous types of income tax slab for AY 2024-25. Keep scrolling through to know the details:

New Tax Regime

Budget 2020 brought in a new tax system that changed the tax slabs and provided taxpayers with reduced tax rates. However, those who opt for the new income tax slab 2023-24 cannot claim several exemptions and deductions, including: HRA, LTA, Section 80C, Section 80D and more

Because of this, the new tax regime did not have many takers.

The Income Tax Rates for FY 2021-22 and FY 2023-24 under the new tax regime:

Income Slabs	Income Tax Rates
₹0 - ₹2,50,000	Nil
₹2,50,000 - ₹5,00,000	5% (tax rebate u/s 87A is available)
₹5,00,000 - ₹7,50,000	10%
₹7,50,000 - ₹10,00,000	15%
₹10,00,000 - ₹12,50,000	20%
₹12,50,000 - ₹15,00,000	25%
>₹15,00,000	30%

The Income Tax Rates for FY 2022-23 under the new tax regime:

Income Slabs	Income Tax Rates
₹0 - ₹2,50,000	NIL
₹2,50,000 - ₹3,00,000	5%
₹3,00,000 - ₹5,00,000	5%
₹5,00,000 - ₹6,00,000	10%
₹6,00,000 - ₹7,50,000	10%
₹7,50,000 - ₹9,00,000	15%
₹9,00,000 - ₹10,00,000	15%
₹10,00,000 - ₹12,00,000	20%
₹12,00,000 - ₹12,50,000	20%
₹12,50,000 - ₹15,00,000	25%
>₹15,00,000	30%

Old Tax Regime

The old regime existed before the implementation of the new regime. Within this system, more than 70 exemptions and deductions, such as those for HRA and LTA, decrease taxable income and consequently lessen tax obligations. Among these deductions, Section 80C stands out as particularly popular and beneficial, permitting a reduction in taxable income of up to ₹1.5 lakh. Taxpayers are presented with the option to select between the old and new tax regimes.The tax rates under the old tax regime remained unchanged for FY 2021-22, 2022-23, 2023-24.

Income Slabs	Individuals Below The Age Of 60 Years and NRIs
Up to ₹2.5 lakh	NIL
₹2.5 lakh - ₹5 lakh	5%
₹5 lakh - ₹10 lakh	20%
>₹10 lakh	30%
Income Slabs	Tax Slabs for Seniors (Aged 60 Years But Less Than 80 Years)
₹0 - ₹3 lakh	NIL
₹3 lakh - ₹5 lakh	5%
₹5 lakh - ₹10 lakh	20%
>₹10 lakh	30%
Income Slabs	Income Tax Slab for Super Senior Citizens (Aged 80 Years And Above)
₹0 - ₹5 lakh*	NIL
₹5 lakh - ₹10 lakh	20%
>₹10 lakh	30%

Comparison of Tax Rates under New Tax Regime & Old Tax Regime

Slabs	Old Tax Regime			New Tax Regime
	<60 years	>60 to <80 years	>80 years	FY 2022-23	FY 2023-24
₹0 - ₹2,50,000	NIL	NIL	NIL	NIL	NIL
₹2,50,000 - ₹3,00,000	5%	NIL	NIL	5%	NIL
₹3,00,000 - ₹5,00,000	5%	5% (tax rebate u/s 87A is available)	NIL	5%	5%
₹5,00,000 - ₹6,00,000	20%	20%	20%	10%	5%
₹6,00,000 - ₹7,50,000	20%	20%	20%	10%	10%
₹7,50,000 - ₹9,00,000	20%	20%	20%	15%	10%
₹9,00,000 - ₹10,00,000	20%	20%	20%	15%	15%
₹10,00,000 - ₹12,00,000	30%	30%	30%	20%	15%
₹12,00,000 - ₹12,50,000	30%	30%	30%	20%	20%
₹12,50,000 - ₹15,00,000	30%	30%	30%	25%	20%
>₹15,00,000	30%	30%	30%	30%	30%

Did You Know?

Nitin Gupta, Chairman of the Central Board of Direct Taxes (CBDT), announced a significant change benefiting India's 3.5 crore salaried taxpayers.

Surcharge on Income Tax for FY 23-24

The surcharge rate for individuals is different from that of other taxpayers. Below is the table with the rates of surcharge tax slab for AY 2024-25 for various types of taxpayers:

Income Tax for Individual/ HUF/ AOP/ BOI/ Artificial Judicial Person

Income Tax Slab	Surcharge Rate on Income Tax
Less than ₹50 Lakhs	Nil
₹50 Lakhs - ₹1 Crore	10%
₹1 Crore - ₹2 Crore	15%
₹2 Crore - ₹5 Crore	25%*
More than ₹5 Crore	37%*

Income Tax for Firm/LLP/Local authorities/Co-operative Society

Income Tax Slab	Surcharge Rate on Income Tax
More than ₹1 Crore	12%

Income Tax for Domestic Company

Income Tax Slab	Surcharge Rate on Income Tax
₹1 Crore - ₹10 Crore	7%
More than ₹10 Crores	12%

Income Tax for Foreign Companies

Income Tax Slab	Surcharge Rate on Income Tax
₹1 Crore - ₹10 Crore	2%
More than ₹10 Crore	5%

Steps to Calculate Income Tax from Income Tax Slabs

Given below are the steps to calculate the Income Tax based on the 2023-24 income tax slab. In the income tax calculator FY 2023-24,

Select your age

Enter your annual income

Enter your investment details under Section 80C, 80CCC, 80CCD (1)

Enter your medical insurance premium paid under Section 80D if you have a health insurance plan

Enter additional NPS Self Contributions up to ₹50000 under Section 80CCD(1B)

Enter employer contribution for NPS under Section 80CCD (2)

After completing these procedures, you will receive an overview of your taxable income, investments, annual income, and the amount of tax due.

Note: For any field that does not apply to you, you can put "0".

Forms You Should Know About

Form No. : 3CA	Audit report under section 44AB of the Income-tax Act, 1961, in a case where the accounts of the business or profession of a person have been audited under any other law
Form No. : 3CB	Audit report under section 44AB of the Income-tax Act, 1961, in the case of a person referred to in clause (b) of sub-rule (1) of rule 6G
Form No. : 3CD	Statement of particulars required to be furnished under section 44AB of the Income-tax Act, 1961
Form No. : 3CEB	Report from an accountant to be furnished under section 92E relating to international transaction(s)
Form No. : 10A	Application for registration of charitable or religious trust or institution under section 12A(1)(AA) of the Income-tax Act, 1961
Form No. : 10B	Audit report under section 12A(b) of the Income-tax Act, 1961, in the case of charitable or religious trusts or institutions
Form No. : 15CA	Information to be furnished for payments, chargeable to tax, to a non-resident not being a company or to a foreign company
Form No. : 15CB	Certificate of an accountant
Form No. : 15G	Declaration under sub-sections (1) and (1A) of section 197A of the Income-tax Act, 1961, to be made by an individual or a person (not being a company or a firm) claiming certain receipts without deduction of tax
Form No. : 15H	Declaration under sub-section (1C) of section 197A of the Income-tax Act, 1961, to be made by an individual who is of the age of sixty years or more claiming certain receipts without deduction of tax
Form No. : 16	Certificate under section 203 of the Income-tax Act, 1961 for tax deducted at source from income chargeable under the head "Salaries"
Form No. : 16A	Certificate under section 203 of the Income-tax Act, 1961 for tax deducted at source
Form No. : 26AS	Annual Tax Statement under section 203AA
Form No. : 35	Appeal to the Commissioner of Income-tax (Appeals)
Form No. : 36	Form of appeal to the Appellate Tribunal
Form No. : 49A	Application for Allotment of Permanent Account Number [In the case of Indian Citizens/Indian Companies/Entities incorporated in India/Unincorporated entities formed in India]
Form No. : 49AA	Application for Allotment of Permanent Account Number [Individuals not being a Citizen of India/Entities incorporated outside India/ Unincorporated entities formed outside India]
Form No. : 49B	Form of application for allotment of Tax Deduction and Collection Account Number under section 203A of the Income-tax Act, 1961
Form No. : 60	Form of declaration to be filed by a person who does not have a permanent account number and who enters into any transaction specified in rule 114B

What is the Taxable Income?

Taxable income is referred to as any gross income that is utilised to determine your tax liability. It is the portion of your gross income used to calculate how much you owe in a given tax year. The taxable income can be described as Adjusted Gross Income (AGI) minus allowable itemised or standard deductions. Taxable income includes wages, salaries, bonuses, tips, investments, and various unearned income types.

It includes both earned and unearned income. Unearned taxable income includes cancelled debts, government benefits (unemployment and disability payments), strikes, and lottery payments. Taxable income includes earnings generated from appreciated assets sold during the year as well as dividends and interest income. Regarding deductions, the IRS offers individual tax filers the option to claim the standard deduction or a list of itemised deductions.

Itemised deductions include interest paid on mortgages, medical expenses exceeding a specific threshold (7.5% of your AGI), and a range of other expenses. Businesses do not report their revenue directly as taxable income when they file their taxes. Instead, to determine their income, they deduct their company expenses from their revenue. From there, they deduct other expenses to determine their net worth.

Different Types of Taxable Income in India 2024

Listed below are the different types of taxable incomes in India :

Capital gains
Corporate tax
Income
Income from house property
Dividends
Income from other sources
Business or professional income
Salary
Gifts
Profits and gains
Agricultural income
Employee compensations
House rent Allowance
Alimony
Assessment year
Entertainment allowance
Hostel Expenditure Allowance
Interest
Service tax
Taxable allowance

How to Calculate Taxable Income?

The process of calculating taxable income is simple and hassle-free. The consumer must total every income received in order to determine the amount of income tax that must be paid. Deductions and exemptions subsequently lower the tax liability. An income tax calculator FY 2023-24 is accessible to the general public on Income Tax India's official website. The user can compute their income using the tax calculator by entering a few details.

Listed below are a few details that need to be filled out while calculating the tax:

Assessment year

Taxpayer

Residential status

Income from salary

Income from house property

Capital gains

Income from other sources

Profits and gains

Agricultural income

Deductions

Points to Consider When Selecting the Tax Regime in 2024

It makes sense to choose the regime with the lesser tax burden, and it's crucial to let the employer know about this decision so that the right amount of Tax Deducted at Source (TDS) can be withheld from the employee's pay. Here are some other top points to consider while choosing the tax regime:

Assess Your Investment Choices: Consider the way in which your investment decisions correspond with the tax advantages provided by each tax regime. Several investments under the previous system offered tax benefits, such as NPS (National Pension Scheme) and ELSS (Equity-Linked Savings Scheme). On the other hand, the new system might reward investments with smaller tax advantages but larger post-tax profits.

Compare Tax Slabs and Rates: Analyse the income tax slab rates for each system. While the new system offers lower income tax slab rates but fewer deductions, the old system offers various tax slabs at varying rates. Determine which tax system is more advantageous for you by calculating your tax liability under each one based on your income level.

Analyse Available Deductions and Exemptions: Examine the exemptions and deductions that were offered under the previous system and determine how important they were in lowering your tax obligation. Compare these with the current regime's restricted deductions. Think about typical deductions such as Section 24 (interest on home loans), Section 80D (health insurance premiums), and Section 80C (investments). Choose the regime that will save you the most money on taxes.

Consider Long-Term Implications: While immediate tax savings are significant, you need also think about the decision's long-term effects. Analyse the chosen regime's compatibility with your future tax planning, investment plans, and financial objectives. Make sure your choice considers your overall financial goals in addition to the immediate tax savings.

How Do You Know Which Income Tax Slab You Fall Into?

Currently, there are two different income tax regimes: old and new tax regimes. Under both the regimes, taxpayers can avail of tax benefits.

The finance minister announced that under the new tax regime of the income tax, the rebate had been increased to ₹7 lakh from the pre-existing limit of ₹5 lakh. Apart from that, the surcharge rate on income of ₹5 crore and above has decreased from 37% to 25%.

Revised Income Tax Slabs for the New Tax Regime (default) FY 2023–24:

Tax Slab	Deduction (%)
Up to ₹3 lakh	0% (Nil)
₹3 lakh to ₹6 lakh	5%
₹6 lakh to ₹9 lakh	10%
₹9 lakh to ₹12 lakh	15%
₹12 lakh to ₹15 lakh	20%
Above ₹15 lakh	30%

Wrapping Up

Both the old and the new tax regime under the tax slab for AY 2024-25 have their benefits. The old tax regime focuses on inculcating saving habits, while the new tax regime is easy to understand and simplifies the taxation process. Deciding between the two regimes hinges largely on one's income tax slab, with individuals able to leverage tax calculators to determine which regime offers the most favourable outcome for their financial situation. Yet, amidst this decision-making process, the fundamental responsibility of every citizen remains constant: to ensure the timely payment of taxes. It depends upon each individual to fulfil their tax obligations punctually, contributing their fair share towards the functioning of society and the nation's development. While the choice between tax regimes may vary, the commitment to responsible tax citizenship remains essential.

Glossary:

Progressive Taxation Scheme: A tax system where tax rates increase as income levels rise.

NPS (National Pension System): A government-sponsored retirement savings scheme that allows individuals to contribute regularly towards their pension fund.

Adjusted Gross Income: This refers to total income after accounting for certain deductions, such as business expenses, retirement contributions, and alimony payments, and is used to calculate taxable income.

Itemised deductions: Specific expenses that taxpayers can subtract from their adjusted gross income to reduce taxable income

How to Save Tax for Salary above 15 Lakhs in India?

Penalty on Interest Imposed Under Section 234A, 234B, and 234C

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Income Tax Slab FAQs

There are benefits and drawbacks to both the new and the old tax systems. While the new tax regime favours employees with lesser salaries and assets, leading to fewer deductions and exemptions, the old tax regime encouraged taxpayers to develop a saving habit.

As per the new regime, a 10% tax will be applicable on your income if it falls between the income bracket of ₹6-9 LPA.

No, the country's most recent income tax slab for women is equal to that for men.

Under the new tax regime, the tax exemption limit of ₹2.5 lakh has been raised to ₹3 lakh.

According to Budget 2023, you can choose between the old and new regimes. However, the number of times a person can alternate between the two depends upon their income type. A salaried person can alternate between the new and old tax regimes every year.

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Income Tax Slab 2023-24: A Comprehensive Look at the New Slabs

Table Of Content:

What is an Income Tax Slab?