Income Tax Slab FY 2022-23 (AY 2023-24)
The calculation of income tax in India is based on income tax slabs and rates for the applicable financial year (FY) and assessment year (AY). The income tax slabs for FY 2022-23 were announced as part of the Union Budget 2022-23 and the income tax slab rates for FY 2022-23 (AY 2023-24) are the same as income tax slabs and rates in FY 2021-22 (AY 2022-23). Read on to know the income tax slab rates for FY 2022-23 (AY 2023-24), the types of taxable income in India and some of the key differences in the slab rates between the new and the old tax regime....Read More
With Max Life Investment Plans
- 100% Guaranteed returns*#
- Save tax up to Rs. 46,800*#
Written by
Reviewed by
Income Tax Slab Rates AY 2023-24 for Individuals Below 60 Years, NRIs and HUFs
Now let us take a look at the income tax slabs for FY 2022-23 (AY 2023-24) under both tax regimes for resident individuals aged less than 60 years, Hindu Undivided Family (HUF) and Non-Resident Indians (NRI) with income in India:
| Net Taxable Income | New Tax Regime Income Tax Slab Rates FY 2022-23 | Old Tax Regime Income Tax Slab Rates FY 2022-23 |
|---|---|---|
| Up to Rs 2.5 lakh | Exempt | Exempt |
| Rs 2,50,001 to Rs 5 lakh | 5% | 5% |
| Rs 5,00,001 to Rs 7.5 lakh | 10% | 20% |
| Rs 7,50,001 to Rs 10 lakh | 15% | |
| Rs 10,00,001 to Rs 12.5 lakh | 20% | 30% |
| Rs 12,50,001 to Rs 15 lakh | 25% | |
| Over Rs. 15 lakh | 30% |
Income Tax Slabs FY 2022-23 (AY 2023-24) for Senior Citizen Taxpayers
In India, Senior Citizen tax payers are individuals above 60 years of age but below 80 years of age. These tax payers enjoy a higher basic exemption limit of Rs. 3 lakh as compared to individuals aged below 60 years under the old tax regime. However, this benefit of higher exemption is not available for senior citizen tax payers opting for the new tax regime. The below table summarizes the Income Tax slab rates in AY 2023-24 (FY 2022-23) for senior citizens in India:
| Net Taxable Income | Income Tax Slab Rates FY 2022-23 (Old Tax Regime) | Income Tax Slab Rates FY 2022-23 (New Tax Regime) |
|---|---|---|
| Up to Rs 2.5 lakh | Nil | Nil |
| Rs 2,50,001 to Rs 3 lakh | 5% | |
| Rs 3,00,001 to Rs 5 lakh | 5% | |
| Rs 5,00,001 to Rs 7.5 lakh | 20% | 10% |
| Rs 7,50,001 to Rs 10 lakh | 15% | |
| Rs 10,00,001 to Rs 12.5 lakh | 30% | 20% |
| Rs 12,50,001 to Rs 15 lakh | 25% | |
| Over Rs. 15 lakh | 30% |
Income Tax Slabs in AY 2023-24 (FY 2022-23) for Super Senior Citizens
Under current tax rules, super senior citizen tax payers are individuals who are aged 80 years or more. Under the old tax regime, super senior citizens have a higher basic exemption limit of Rs. 5 lakh as per income tax slab rates for the financial year 2022-23. This benefit is however not applicable under the new tax regime even though the slab rates for AY 2023-24 are lower as compared to the old tax regime. The below table summarizes the income tax slab and rates applicable to super senior citizens in FY 2022-23:
| Net Taxable Income | Old Tax Regime Income Tax Slab Rates (FY 2022-23) | New Tax Regime Income Tax Slab Rates (FY 2022-23) |
|---|---|---|
| Up to Rs 2.5 lakh | Nil | Nil |
| Rs 2,50,001 to Rs 5 lakh | 5% | |
| Rs 5,00,001 to Rs 7.5 lakh | 20% | 10% |
| Rs 7,50,001 to Rs 10 lakh | 15% | |
| Rs 10,00,001 to Rs 12.5 lakh | 30% | 20% |
| Rs 12,50,001 to Rs 15 lakh | 25% | |
| Over Rs. 15 lakh | 30% |
Beyond the income tax liability computed using the Income Tax slab rates for FY 2022-23, you also have to pay a 4% health and education cess as part of your overall tax outgo for the fiscal.
New Income Tax Slab Rates Announced in Budget 2023
The Union Budget 2023 announced a change to number of income tax slabs applicable to the new tax regime for FY 2023-24 i.e. AY 2024-25 along with an increase in the tax exemption limit to Rs. 3 lakh. These changes are however not applicable to the old tax regime for FY 2023-24. Subsequent to these changes, the comparison of old tax regime (tax payer aged less than 60 years) vs. new tax regime slab rates for FY 2023-24 (AY 2024-25) looks like this:
| Net Annual Taxable Income | New Tax Regime Slab Rates (FY 2023-24) | Old Tax Regime Slab Rates (FY 2023-24) |
|---|---|---|
| Up to Rs 2.5 lakh | Exempt | Exempt |
| Over Rs. 2.5 lakh to Rs. 3 lakh | 5% | |
| Over Rs. 3 lakh to Rs. 5 lakh | 5% | |
| Over Rs. 5 lakh to Rs. 6 lakh | 20% | |
| Over Rs. 6 lakh to Rs. 9 lakh | 10% | |
| Over Rs. 9 lakh to Rs. 10 lakh | 15% | |
| Over Rs. 10 lakh to Rs. 12 lakh | 30% | |
| Over Rs. 12 lakh to Rs. 15 lakh | 20% | |
| Above Rs. 15 lakh | 30% |
As you can see, subsequent to the Budget 2023 announcement of tax slab rates for AY 2024-25, the number of slabs available under the new tax regime has decreased to 5 from the current 6 in AY 2023-24. Additionally, Budget 2023 has also increased the income tax rebate limit for individuals opting for the new tax regime to Rs. 7 lakh for FY 2023-24 from the current FY 2022-23 rebate limit of Rs. 5 lakh. However, none of the above changes are applicable if you opt for the old tax regime in FY 2023-24 i.e. AY 2024-25.
What is Income Tax Slab?
Income tax is simply the tax you need to pay on income during a financial year. In India, the income tax system is progressive in nature i.e. if you have low income, you pay lower tax and if you have high income, you pay tax at a higher rate.
In order to determine the rate at which income tax needs to be paid, the Government of India has introduced income tax slabs and applicable rates. The income tax slab specifies a range within which a pre-determined rate of taxation is applicable. Based on the income tax slab a taxpayer falls in, the applicable income tax rate is identified which is used to calculate the income tax liability for the applicable fiscal.
Currently Indian tax payers can choose between 2 different tax regimes – the old tax regime and the new tax regime. The income tax slabs and rates for FY 2022-23 (AY 2023-24) are different based on whether the tax payer has chosen the new or the old tax regime to compute tax liability for the fiscal.
Types of Taxable Income in India
Income tax is applicable to various types of tax payers like individuals, trusts, corporations, etc. Therefore, there are multiple sources of income that can be subject to income tax in India. Here are some of the different types of taxable income in India as per the Income Tax Act, 1961:
· Income from Salary or Pension
Under this category, the taxes are usually applied to the basic salary, allowances, and profit made from the salary. An individual's pension after retirement is also taxed based on the income tax slab. The income tax slab rates FY 2022-23 (AY 2023-24) differ based on the age of the individual who is receiving a salary or pension during the fiscal.· Income from Business
The profits made from businesses are also included as an income that is taxable. The tax in this particular category is obtained from the presumptive or actual income that the profession or business may incur. However, it is only done after the adjustments to the allowable deductions are made. In FY 2022-23, different rates are applicable to business income of individuals and corporations. While corporations are subject to corporation tax, individuals with business income will be taxed as per income tax slabs and rates for AY 2023-24.· Income from House Property
Owning more than one house property and giving them up for rent is an easy way to make extra income. However, in such cases, income received from rental of house property is treated as part of the taxpayer’s income. So this income is taxable as per the income tax slab rates for FY 2022-23.· Income from Winning Lottery, Horse Races, etc.
The income from other sources like winning lottery, horse races etc., are taxable in India. However, under prevailing tax laws, these earnings are taxed separately and not as per income tax slab rates of FY 2022-23.· Income Generated from Capital Gains
Capital Gains income can be obtained from the sale of assets such as gold, house property, mutual funds units, stocks, debentures, etc. Depending on the type of asset and the profits made on it over time, it can be classified as a long-term or short-term capital gain. Even though these incomes are part of the income tax regime, capital gains tax rules of 2022-23 are independent of the income tax slabs for AY 2023-24.Key Differences Between New & Old Tax Regimes
In FY 2020-21, a new tax regime was introduced in addition to the prevailing old tax regime. In FY 2022-23 (AY 2023-24), tax payers can choose to opt for either of these income tax regimes and pay tax accordingly. There are 2 key differences between these two income tax regimes in India:
- Firstly, the new tax regime includes more tax slabs with lower tax rates as compared to the old tax regime. Hence, the income tax slabs for FY 2022-23 (AY 2023-24) are different based on whether you opt for the new or the old tax regime.
- Secondly, all the major deductions and exemptions such as Section 80C, Section 80D, etc. that are available under the old tax regime are not allowed if you opt for the new tax regime.
Deductions and exemptions allow tax payers to reduce their taxes by investing, saving or spending on specific financial instruments. The new tax regime offers you very few exemption or deduction options even though the income tax slab rates for AY 2023-24 are lower compared to the old tax regime. In contrast, the old tax regime provides up to 70 deductions or exemptions to lower your taxable income and income tax liability for FY 2022-23.
Surcharge on Income Tax in AY 2023-24
Taxpayers in the high income group with net taxable income exceeding 50 lakhs in assessment year 2023-24 i.e. financial year 2022-23, have to pay a surcharge on their income tax computed based on the income tax slab rates for FY 2022-23. The applicable rate of surcharge is as follows for FY 2022-23:
| Net Taxable Income (AY 2023-24) | Rate of Surcharge on Income Tax (%) |
|---|---|
| Rs. 50 lakh to Rs 1 crore | 10 |
| Rs. 1 crore to Rs. 2 crore | 15 |
| Rs. 2 crore to Rs. 5 crore | 25 |
| Rs. 5 crore and above | 37 |
Things to Keep in Mind Before Opting for the New Tax Slab
The option to choose between either the new tax regime or the old tax regime is currently available to individual tax payers in India. But before you make your choice, here are 5 key things you should keep in mind:
· Consider Tax Saving Deductions and Exemptions
In FY 2022-23, the new tax regime has lower income tax slab rates and more income tax slabs compared to the old regime. But the new tax regime offers very few exemptions and deductions. These include about 70 deductions and exemption like HRA, Section 80C deductions and home loan interest benefit that can be claimed under the old tax regime but cannot be claimed under the new regime.· Lower Tax Exemption Limit Based on Age
The old tax regime provides higher tax exemption for senior citizens and super senior citizens of Rs. 3 lakh and Rs. 5 lakh respectively as per income tax slab rates in AY 2023-24. This higher limit is not available under the new tax regime, which offer the same Rs. 2.5 lakh exemption limit irrespective of the taxpayer’s age.· Consider Benefits Beyond Tax Savings
Tax saving investments and expenses like a term life insurance policy, Public Provident Fund, National Pension System provide a dual benefit under the old tax regime. On the one hand, you decrease your tax outgo, on the other hand they also provide benefits like financial security of loved ones or long-term wealth creation. In the case of the new tax regime, you do not receive the tax saving benefit at all.
However, the tax benefits of these investments are limited up to Rs. 2 lakh in a fiscal after including the Rs. 50,000 benefit offered u/s 80 CCD (1B). So, you need to use an income tax calculator to compute your tax outgo under both the new and old regime in order to determine which is suitable for you based on the income tax slab rates for FY 2022-23.
FAQs
No. As a taxpayer, you can choose to either opt for the new or the old tax regime and pay your taxes based on the applicable income tax slab rates for FY 2022-23 i.e. AY 2023-24.
It is mandatory to file your ITR only if your total annual income exceeds the maximum exempt amount of Rs 2.5 lakh.
Yes, the new income tax slabs for AY 2023-24 (FY 2022-23) under the new tax regime does not change based on the age of the tax payer. So, the limit of maximum tax-exempt income is Rs 2.5 lakh regardless of the individual taxpayer's age.
The standard deduction of Rs. 50,000 annually on salary cannot be claimed under the new tax regime. You have to opt for the old tax regime to avail this benefit.
The income slab rates for FY 2022-23 (AY 2023-24) are currently the same as the slab rates announced for AY 2022-23.
ARN NO: Jan23/Bg/23R
cleartax.in/s/income-tax-slabs
www.creditmantri.com/article-what-types-of-incomes-are-taxable-in-india/
www.livemint.com/money/new-income-tax-regime-vs-old-income-tax-regime-what-should-you-opt-for-in-2022-11644713424562.html
www.taxmann.com/post/blog/income-tax-slab-rates/
www.incometaxindia.gov.in/_layouts/15/dit/mobile/viewer.aspx?path=www.incometaxindia.gov.in/charts++tables/tax+rates.htm&k&IsDlg=0
www.valueresearchonline.com/stories/47951/choosing-between-the-old-and-new-tax-slabs/
Related Articles
Calculators
Term Insurance Articles
Life Insurance Articles
Health Insurance Articles
Investment Articles
- Benefits of ULIP Investment Plan
- Types of ULIPs
- How to Save Tax with ULIPs
- Maximize Returns With ULIPs
- Best Short Term Investments for Tax Saving
- What is Power of Compounding
- What is Investment
- Types of Investment in India
- 80C Investment Options
- Fixed Deposit Interest Rates
- Voluntary Provident Fund
- Difference Between Saving And Investing
- What is Fixed Deposit
- What is Term Deposit
- What is Recurring Deposit
- Fixed Deposit vs Recurring Deposit
- What is KYC
- Max Life Guranteed Income Plan
- What is ULIP
4.2
Was the Information Helpful?
Very Good
Secure your family against unexpected situations with Max Life Insurance
99.34% Claim paid ratio^
Financial protection throughout life
- 0124 648 8900(09:00 AM to 09:00 PM Monday to Saturday)
- service.helpdesk@maxlifeinsurance.comEmail
- SMS ‘LIFE’ to 5616188Message
- Let us call you back
- 1860 120 5577(9:00 AM to 6:00 PM Monday to Saturday)
- Chat with us
- Write to usPlease write to us incase of any escalation/feedback/queries.
- 011-71025900, 011-61329950(9:00 AM to 6:00 PM Monday to Saturday)
- nri.helpdesk@maxlifeinsurance.comPlease write to us incase of any escalation/feedback/queries.