Income Tax Slabs and Rates For FY 2023-24 - Old & New Tax Regimes_banner

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Income Tax Slabs and Rates For FY 2023-24 - Old & New Tax Regimes_WC

A financial budget is an annual financial statement presented by the government, detailing the government's expected revenue and expenditures for the upcoming fiscal year. The budget serves as a financial plan for the government, outlining the revenue it hopes to earn from taxes and other sources, as well as the expenses it anticipates incurring for various programs and projects. This document is crucial as it reflects the government's priorities, policies, and sets the direction for the country's economic development. The finance minister usually presents the budget in Parliament on the first of February, and it is widely debated, analyzed, and discussed by experts, economists, and the general public.

​​The Finance Minister, Nirmala Sitharaman, unveiled the Union Budget on 1 February 2023, which also introduced the new Income Tax Rates for the financial year. The change was implemented to encourage citizens to save more and have more choice in the way they allocate their personal finances. ​

What is Income Tax Slab?

An income tax slab is a set of income levels that are taxed at a fixed rate set by the government. The income tax slab system in India determines how much tax an individual must pay based on their taxable income. The government revises the income tax slabs on a regular basis to account for changes in inflation and the cost of living.

The income tax slabs are divided into different categories, such as individual taxpayers, Hindu Undivided Families (HUFs), firms, and companies. Different tax rates apply to different levels of taxable income within each category, with higher rates applied to higher levels of income.

New Income Tax Slab for FY 2023 - 2024_WC

New Income Tax Slab for FY 2023 - 2024

According to the Union Budget for 2023, the Income Tax Slabs have undergone changes, and the basic income exemption rate has been increased from Rs.2.5 Lakh to Rs.3 Lakh. under this new tax regime.

Additionally, the upper limit for the rebate under Section 87A has been raised from Rs.5 Lakh to Rs.7 Lakh. It's important to keep up-to-date with the latest changes in the Income Tax Slabs and use an income tax calculator to accurately calculate your tax liability based on your income level and category.

Here Is the New Income Tax Slab for FY 2023-2024_WC

​New Income Tax Slab Rates for FY2023-24

Income Tax Slab Income Tax Rate (%)
Between Rs. 0 and Rs. 3,00,000 0
Between Rs. 3,00,001 and Rs. 6,00,000 5% on income in excess of Rs.3,00,000
Between Rs. 6,00,001 and Rs. 9,00,000 Rs.15,000 + 10% of income above Rs.6,00,000
Between Rs. 9,00,001 and Rs. 12,00,000 Rs.45,000 + 15% on income above Rs.9,00,000
Between Rs. 12,00,001 and Rs. 15,00,000 Rs.90,000 + 20% on income above Rs.12,00,000
Above Rs. 15,00,001 Rs.150,000 + 30% on income above Rs.15,00,000

Here are some of the differences between the old tax regime (2022-2023) and new tax regime (2023-2024):

  • The Income tax slabs have been reduced from 6 to 5.
  • The basic exemption limit has been increased from Rs.2.5 Lakh to Rs.3 Lakh.
  • Under the new tax regime, the highest surcharge rate has been reduced from 37% to 25%.
  • ​Surcharge rates are not applicable to income which is taxable under Section 111A (short term capital gain on shares), Section 112A (long term capital gain on shares) and Section 115AD (tax on income of foreign institutional investors). 15% will be the highest rate of surcharge for tax payable for these incomes. ​​
  • ​​​Note that the maximum surcharge rate on taxes payable for capital gain or dividend income mentioned in Section 112 is 15% in AY 2023-2024. 15% is also the maximum surcharge rate applicable to an Association of Persons (AoP) comprising entirely of various companies. ​​
  • ​​​Note that health and education cess at a 4% rate will get added to one’s income tax liability along with surcharge in every case. ​​
  • For salaried individuals and pensioners, a standard deduction of Rs.50,000 has been introduced beginning in fiscal year 2023-24.
  • The tax rebate under Section 87A has been increased from Rs.5 Lakh to Rs.7 Lakh of taxable income. The tax rebate has been increased from Rs.12,500 to Rs.25,000.

New Regime Income Tax Slab Rates for Individual_WC

New Regime Income Tax Slab Rates for Individual

The new income tax slab rate for individuals for the financial year 2023-2024 has been revised. The income tax slab rates are applicable for Resident Individuals aged less than 60 years, i.e., below 59 years

Income Tax Slab Rates for Individuals for FY​ ​2023-24:

Income Level Basic Surcharge Cess Tax Liability
2,50,000
3,00,000
5,00,000
6,00,000 - - -
7,00,000 - - - -
7,50,000 30,000 - 1,200 31,200
9,00,000 45,000 - 1,800 46,800
10,00,000 60,000 - 2,400 62,400
12,00,000 90,000 - 3,600 93,600
12,50,000 1,00,000 - 4,000 1,04,000
15,00,000 1,50,000 - 6,000 1,56,000

Things You Must Keep in Mind Before Opting for the New Tax Slab_WC

Things You Must Keep in Mind Before Opting for the New Tax Slab

Here are a few things that you must keep in mind before opting to pay the income tax under the new tax slab 2023-24:

  • The new tax regime may affect the exemptions and deductions to which you are entitled. Make certain you understand how the new regime will affect your exemptions and deductions.
  • If you are an individual or a member of a Hindu Undivided Family (HUF) and do not have any business income, you can exercise the option on or before for each previous year.
  • As a taxpayer, once you select the next tax regime, you cannot switch to another option during the year.
  • The new tax regime may affect the exemptions and deductions to which you are entitled. Make certain you understand how the new regime will affect your exemptions and deductions.
  • It is crucial to calculate your tax liability under both the old and new tax regimes to determine which is more beneficial to you as the new tax slab may lead to a decrease or increase in your tax liability.

Conditions for Opting New Tax Regime

To be eligible for the lower income tax rates under the new regime, the following conditions must be met by the individual or HUF's total income:

  • No business income is included.
  • No exemptions or deductions from the Income Tax Act are taken into account.
  • Losses, including carry forward and depreciation-related losses, are not offset.
  • Capital losses from the sale of house property cannot be deducted.
  • No exemptions or deductions for allowances or perquisites from any other law are taken into account.

How Income Tax is Calculated for FY 2023-24 Under the New Tax Regime?

Total Gross Income Rs. 12 Lakh
Deductions (80C, 80CCD) NIL
HRA NIL
Travel and Medical Allowance NIL
Taxable Income Rs.12 Lakh
Up to Rs3 Lakh NIL
Above Rs.3 Lakh - Rs.6 Lakh Rs.15,000
Above Rs.6 Lakh - Rs.9 Lakh Rs.30,000
Above Rs.9 Lakh - Rs.12 Lakh Rs. 45,000
Above Rs.12 Lakh - Rs.15 Lakh NIL
Total Tax that must be Paid Rs. 90,000

Income Tax Slabs and Rates as Per Old Tax Regime FY 2023-24

Income Tax Slab for Individuals who are below 60 years as per the old tax slab regime.

Income Tax Slab Tax Rate
Up to Rs.2.5 Lakh NIL
Between Rs.2.5 Lakh and Rs.5 Lakh 5% of the total income above Rs.2.5 Lakh + 4% Cess
Between Rs.5 Lakh and Rs. 10 Lakh 20% of the total income above Rs.5 Lakh + Rs. 12,500 + 4% Cess
Above Rs.10 Lakh 30% of the total income above Rs.10 Lakh + Rs. 1,12,500 + 4% Cess

Income Tax Slab Between 60-80 Years (Senior Citizen) as per the Old Tax Slab Regime

Income Tax Slab Tax Rate
Up to Rs.3 Lakh NIL
Between Rs.3 Lakh and Rs.5 Lakh 5% of the total income above Rs.3 Lakh + 4% Cess
Between Rs.5 Lakh and Rs.10 Lakh 20% of the total income above Rs.5 Lakh + Rs.10,500 + 4% Cess
Above Rs.10 Lakh 30% of the total income above Rs.10 Lakh + Rs. 1,10,000 + 4% Cess

Income Tax Slabs for Individual above 80 years (Super Senior Citizen)

Income Tax Slab Income Tax Slab Tax Rate
Up to Rs.5 Lakh NIL
Between Rs.5 Lakh and Rs.10 Lakh 20% of the total income above Rs.5 Lakh + 4% Cess
Above Rs.10 Lakh 30% of the total income above Rs.10 Lakh + Rs. 1,00,000 + 4% Cess

For Domestic Companies, The Tax-Slabs Depends on Turnover as Mentioned Below

Income Tax Slab Tax Rate
The previous year's gross turnover can be no more than Rs.250 Crore 25%
The previous year's gross turnover was more than Rs.250 Crore 30%

Comparison of Income Tax Slabs Under New Tax Regime and Old Tax Regime

​​​Taxable Income​ New Regime​​ ​​​Old Regime​​
​​​Up to Rs. 2.5 lakh​​ ​​​Exempt ​​ ​​​Exempt​​
​​​Above Rs. 2.5 lakh to Rs. 3 lakh​​ ​​​Exempt​​ ​​ ​​​5%
Above Rs. 3 lakh to Rs. 5 lakh​​ ​​​5%​​ 5%​​
​​​Above Rs. 5 lakh to Rs. 6 lakh​​ 5%​​ ​​​20%​​
​​​Above Rs. 6 lakh to 9 lakh​​ ​​​10%​​ ​​​20%​​
​​​Above Rs. 9 lakh to Rs. 10 lakh​​ ​​​15%​​ ​​ ​​​20%
Above Rs. 10 lakh to Rs. 12 lakh​​ 15%​​ 30%​​
Above Rs. 12 lakh to Rs. 15 lakh​​ 20%​​ ​​​30%​​
Above Rs. 15 lakh ​​​30%​​ ​​​30%​​

Key Differences Between Old and New Tax Regime

You need to know the two differences between India’s income tax regimes to figure out which one is better: ​​

  • ​​​First, the new income tax regime has more tax slabs with lower tax slab rates than the previous tax regime. This will lead to the income tax slabs of FY 2022-2023 fluctuating depending on whether you select the old or new tax regime. ​​
  • ​​​Some of the notable deductions and exemptions which were available under the previous tax regime such as Section 80C and Section 80D are no longer available under the new income tax regime. ​​

Generally, taxpayers used to make investments and spend on specified financial instruments to reduce their tax liability. But the new income tax regime provides for few deductions or exemption choices. ​​

​​​A noteworthy point is that the previous income tax regime allowed for 70 deductions or exclusions to bring down one’s taxable income and total income tax liability. So, opting for the old tax regime may prove to be more beneficial for people who can avail multiple tax deductions and exemptions.​​

​​​On the other hand, the new tax regime offers higher basic exemption and tax rebate limit. So, people in lower income brackets will benefit from the new regime. In addition, they do not have to go through complicated tax calculations with the new regime. Taxpayers who have not made specified investments during the financial year may also opt for the new regime.​​

Also Read: Know about the Various Tax Benefits on Home Loan

*Terms and conditions apply.

Frequently Asked Questions

Frequently Asked Questions

Income Tax Slab Income Tax Rate (%)
Between Rs.0 and Rs.3,00,000 0
Between Rs.3,00,001 and Rs.6,00,000 5% on income in excess of Rs.3,00,000
Between Rs.6,00,001 and Rs.9,00,000 Rs.15,000 + 10% of income above Rs.6,00,000
Between Rs.9,00,001 and Rs.12,00,000 Rs.45,000 + 15% on income above Rs.9,00,000
Between Rs.12,00,001 and Rs.15,00,000 Rs.90,000 + 20% on income above Rs.12,00,000
Above Rs. 15,00,001 Rs.150,000 + 30% on income above Rs.15,00,000

No, once you choose a tax regime for a financial year, you cannot change it during the same financial year. However, you can opt for a different regime in the next financial year.

Individuals under the age of 60 have a tax-free limit of Rs.3 Lakh per financial year, while senior citizens (above 60 years) have a tax-free limit of Rs.3 Lakh per financial year and very senior citizens (above 80 years) have a tax-free limit of Rs 5.Lakh per financial year for the financial year 2023-2024.

No, it is not mandatory to opt for the new tax regime for the financial year 2023-2024. Taxpayers can choose between the old and new tax regimes. The decision to switch or not switch regimes can be made at the start of the fiscal year and is final for the entire year. Before deciding on the best tax regime for one's situation, one should carefully consider their income sources, deductions, and exemptions.

No, because the new tax regime has fewer exemptions and deductions, you will be unable to claim deductions under Section 80C if you choose the new tax regime for the fiscal year 2023-2024. You must choose the old tax regime if you want to claim Section 80C and other deductions.

Income Tax Slabs and Rates For FY 2023-24 _RAC_WC

Income Tax Slabs and Rates For FY 2023-24_PAC

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