Income Tax Slab 2023-24
Nirmala Sitharaman, the Finance Minister of India presented the Union Budget 2023 on 1st February, 2023 and introduced new income tax slabs and rates for the new tax regime. The new tax regime was introduced in Budget 2020 with 6 slabs, which have now been decreased to 5 income tax slabs for regular individuals, senior citizens and HUF (Hindu Undivided Family). Moreover, the basic exemption limit was also increased to Rs. 3 lakh from the earlier Rs. 2.5 lakh in the case of the new tax regime for FY 2023-24. However, no changes for the tax slabs and rates were made in the case of the old tax regime for AY 2024-25 which will remain the same as income tax slab FY 2022-23 (AY 2023-24). Let’s check the updated income tax slab FY 23-2024 for the new tax regime and the old tax regime....Read More
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Income Tax Slabs in FY 2023-24 (AY 2023-24) for HUF and Individuals
As per the Budget 2023 announcement, new income tax slab rates FY 23-2024 for every individual is as below:
| Annual Taxable Income | New Tax Regime | Old Tax Regime |
|---|---|---|
| Up to Rs.2.5 lakh | Exempt | Exempt |
| Over Rs.2.5 lakh to Rs.3 lakh | Exempt | 5% |
| Over Rs.3 lakh to Rs. 5 lakh | 5% | 5% |
| Over Rs.5 lakh to Rs.6 lakh | 5% | 20% |
| Over Rs.6 lakh to Rs. 9 lakh | 10% | 20% |
| Over Rs.9 lakh to Rs.10 lakh | 15% | 20% |
| Over Rs.10 lakh to Rs.12 lakh | 15% | 30% |
| Over Rs.12 lakh to Rs.15 lakh | 20% | 30% |
| Above Rs.15 lakh | 30% | 30% |
However, do keep in mind that a majority of tax saving investments including life insurance tax benefits cannot be claimed if one opts for the new tax regime.
Income Tax Slab for Super Senior Citizens in AY 2024-25 (FY 2023-24)
As per the Income Tax Act, 1961, tax payers above 80 years of age are considered as super senior citizens and they get a higher exemption limit of Rs.5 lakh under the old tax regime. This benefit is however not applicable to super senior citizens opting for the new tax regime slabs in FY 2023-24. Super senior citizens will be required to pay taxes as per the income tax slab FY 2023-24 & AY 2024-25 under the old tax regime and new tax regime as mentioned below:
| Annual Taxable Income | New Tax Regime | Old Tax Regime |
|---|---|---|
| Up to Rs.3 lakh | Exempt | Exempt |
| Over Rs.3 lakh to Rs. 5 lakh | 5% | Exempt |
| Over Rs.5 lakh to Rs.6 lakh | 5% | 20% |
| Over Rs.9 lakh to Rs.10 lakh | 15% | 20% |
| Over Rs.6 lakh to Rs.9 lakh | 10% | 20% |
| Over Rs.10 lakh to Rs.12 lakh | 15% | 30% |
| Over Rs.12 lakh to Rs.15 lakh | 20% | 30% |
| Above Rs.15 lakh | 30% | 30% |
Like other individual tax payers, super senior citizens can also opt for the income tax slab FY 2024 under either the new tax regime or the old tax regime. However, as you can see, the old tax regime offers a higher exemption limit of Rs. 5 lakh as compared to the new tax regime which offers the same exemption limit and income tax slab rates to all eligible tax payers. Moreover, the new tax regime 2023 does not provide most common old regime deductions and exemptions like Section 80C,Section 80D,Section 24 and many more.
Income Tax Slabs & Rates for Senior Citizens in AY 2024-25 (FY 2023-24)
Tax payers aged between 60 years and less than 80 years of age are considered as Senior Citizens as per the Income Tax Act, 1961 and get a higher exemption limit under the old tax regime than taxpayers aged less than 60 years. However, this benefit is not available under the new tax regime AY 2024-25. Let’s compare the income tax slabs and rates for senior citizen as per the old tax regime and new tax regime for FY 2023-24:
| Annual Taxable Income | New Tax Regime | Old Tax Regime |
|---|---|---|
| Up to Rs.3 lakh | Exempt | Exempt |
| Over Rs.3 lakh to Rs. 5 lakh | 5% | 5% |
| Over Rs.5 lakh to Rs.6 lakh | 5% | 20% |
| Over Rs.6 lakh to Rs. 9 lakh | 10% | 20% |
| Over Rs.9 lakh to Rs.10 lakh | 15% | 20% |
| Over Rs.10 lakh to Rs.12 lakh | 15% | 30% |
| Over Rs.12 lakh to Rs.15 lakh | 20% | 30% |
| Above Rs.15 lakh | 30% | 30% |
As you can see, subsequent to the update in the new tax regime in Budget 2023, the basic exemption limit for senior citizen tax payers is now Rs. 3 lakh under both tax regime. However, senior citizens opting for the new tax regime slabs in FY 2023-24 can avail the benefit of lower income tax slab rates for the fiscal while having to forego benefits of various common tax saving investments.
Income Tax Slab for AOP, BOI & AJP in AY 2024-25
Taxpayers other than Individuals and HUF like Association of Persons (AOP), Body of Individuals (BOI) and Artificial Judicial Person (AJP) currently do not qualify for the new tax regime. As, a result, the income tax slabs and rates for these taxpayers in AY 2024-25 are the same as the old tax regime slabs for AY 2023-24 as shown below:
| Net Taxable Income | Income Tax Rate FY 2023-24 |
|---|---|
| Up to Rs. 2.5 lakh | Exempt |
| Over Rs. 2.5 lakh up to Rs. 5 lakh | 5% of income exceeding Rs. 2.5 lakh |
| Over Rs. 5 lakh up to Rs. 10 lakh | Rs. 12,500 + 20% of income exceeding Rs. 5 lakh |
| Over Rs. 10 lakh | Rs. 1,12,500 + 30% of income exceeding Rs. 10 lakh |
Surcharge on Income Tax for FY 23-24
The Budget 2023 announcement also included a decrease in the highest surcharge only in new tax regime applicable to income tax from 37% in AY 23-24 to 25% in AY 24-25. Surcharge is levied on income tax amount if the total income of the tax payer exceeds a specified annual income limit. Here is a comparison of the surcharge rates for the old tax regime vs new tax regime in FY 23-24:
| Income | Surcharge Rate in Old tax regime | Surcharge Rate in New Tax regime |
|---|---|---|
| Less than Rs.50 lakh | NIL | NIL |
| Rs.50 lakh – Rs.1crore | 10% | 10% |
| Rs.1 crore – Rs.2 crore | 15% | 15% |
Rs.2 crore – Rs.5 crore/span> | 25% | 25% |
| Rs.5 crore – Rs.10 crore | 37% | 25% |
| More than Rs.10 crore | 37% | 25% |
Note: 25% and 37% surcharge on income tax is not levied from taxable income under Section 111A, 112A and 115AD of the Income Tax Act, 1961. In such cases, the surcharge on income tax is 15%. However, there is marginal relief available in certain cases on surcharge of income tax.
FAQs
Yes, you are currently allowed to choose and pay taxes either based on the income tax slabs of the updated new tax regime or the old tax regime for AY 2024-25.
Yes, the income tax slab and rates under the new tax regime is same for all taxpayers. Unlike the old tax regime, the tax rates under new regime are same for HUF, individuals aged less than 60 years, senior citizens (more than 60 years of age to 80 years) and super senior citizens (more than 80 years of age).
Yes, this is another change that was announced in the Union Budget 2023. In AY 2024-25, you can avail a flat standard deduction of Rs. 50,000 under both the new tax regime and the old tax regime if you are a salaried individual or a pensioner. However, you will not be able to avail about 70 deductions under the new tax regime as compared to the old tax regime.
No, income tax slab for FY 2023-24 are same for men and women. Only the senior citizens and super senior citizens get different income tax slabs from taxpayers aged less than 60 years under the old tax regime.
No, health and education cess on income tax for FY 2023-24 has been kept at the same rate of 4% as the previous fiscal.
Under Section 87A of the Income Tax Act, 1961, you can avail income tax rebate if your net annual taxable income is not more than Rs.5 lakh under the old tax regime for FY 2023-24. Section 87A is available only for individuals and HUF. The total rebate under Section 87A is Rs. 12,500 or 100% of income tax amount, whichever is less under the old tax regime.
As per Budget 2023 announcement, Section 87A is applicable to the new tax regime for AY 2024-25 if your net taxable income for the fiscal does not exceed Rs. 7 lakh. As a result, if an individual of HUF opts for the new tax regime in FY 23-24, the total rebate available will be up to 100% of the total income tax payable up to Rs. 25,000.
ARN NO: Jul23/Bg/06J
incometaxindia.gov.in/news/finance-bill-2023-highlights.pdf
economictimes.indiatimes.com/wealth/tax/new-income-tax-slabs-for-new-tax-regime-announced-in-budget-2023/articleshow/97508804.cms
www.incometax.gov.in/iec/foportal/help/non-company/return-applicable-0#:~:text=10%25%20%2D%20Taxable%20income%20above%20%E2%82%B9,income%20above%20%E2%82%B9%205%20crore
www.cnbctv18.com/personal-finance/budget-2023-reduces-surcharge-to-25-under-new-tax-slab--check-who-benefits-15838051.htm
incometaxindia.gov.in/tutorials/2%20tax%20rates.pdf
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