Income Tax Slabs FY 2023-24 & AY 2024-25 (New & Old Regime Tax Rates)
The Income Tax applies to individuals based on a slab system, where different tax rates are assigned to different income ranges. As the person’s income increases, the tax rates also increase. This type of taxation allows for a fair and progressive tax system in the country. The income tax slabs are revised periodically, typically during each budget. These slab rates vary for different groups of taxpayers.
- Income Tax Rate for Individuals/HUF – FY 2023-24
The income tax slabs are different under the old and the new tax regimes. Further, the slab rates under the new tax regime are divided into only one category and the slab rates under the old tax regime are divided into three categories which are as follows:
• Indian Residents aged < 60 years and all the non-residents.
• 60 to 80 years: Resident Senior citizens.
• More than 80 years: Resident Super senior citizens.
All the slab rates of income tax applicable for FY 2023-24(AY 2024-25) are as follows:
| Old Regime | |||
| Slabs | Individuals/HUF (Age<60 Years) | Resident senior citizens Age ≥60 but<80 Years | Resident Super senior citizens Age 80 Years and above |
| Up to Rs 2,50,000 | NIL | NIL | NIL |
| Rs. 2,50,001 to Rs 3,00,000 | 5% | NIL | NIL |
| Rs 3,00,001 to Rs 5,00,000 | 5% | 5% | NIL |
| Rs 5,00,001 to Rs 10,00,000 | 20% | 20% | 20% |
| Above Rs 10,00,000 | 30% | 30% | 30% |
| New Regime | |
| Slabs | Income tax rates |
| Up to Rs 3,00,000 | NIL |
| Rs. 3,00,000 to Rs 6,00,000 | 5% (Tax rebate u/s 87A) |
| Rs 6,00,001 to Rs 9,00,000 | 10% (Tax rebate u/s 87A upto Rs 7 Lakhs) |
| Rs 9,00,001 to Rs 12,00,000 | 25% |
| Rs 12,00,001 to Rs 15,00,000 | 20% |
| Above Rs 15,00,000 | 30% |
*Surcharge and cess will be applicable over and above income tax rates.
Note:
For Old Regime, a tax rebate up to Rs.12,500 is applicable if the total income does not exceed Rs 5,00,000 (not applicable for NRIs) However, under the new tax regime rebate is up to Rs.25000 is applicable if the total income does not exceed Rs 7,00,000. (Not applicable for NRIs), hence we can say if total income Rs 7 lakh then tax liability will be NIL under the new regime
Procedural Changes in Filing of Income Tax Return from FY 2022-23 to FY 2023-24?
• For FY 2022-23, the default regime used to be the Old tax regime, if you wanted to go for the new tax regime, you were required to submit Form 10-IE. After the due date, you have to mandatorily file under the old regime only.
• For FY 2023-24, the default regime changed to the new tax regime, now if you want to file the return under the old tax regime by claiming all the deductions, exemptions, and losses, then you have to file within the due date. After the due date, you have to mandatorily file under the new regime by giving up on most of the deductions and exemptions and all losses.
Old Tax regime Vs New Tax regime. Which is better?
Which tax regime better is depends on assesse, nature of income and circumstances.
The new tax regime can largely benefit middle-class taxpayers who have a taxable income of up to Rs 15 lakh. The old regime is a better option for high-income earners.
The new income tax regime is beneficial for people who make low investments. As the new regime offers six lower-income tax slabs, anyone paying taxes without claiming tax deductions can benefit from paying a lower rate of tax under the new tax regime. For instance, the assessee having total income before deduction up to Rs 12 lakh will have higher tax liability under the old system if they have investments less than Rs. 3,12,500. Therefore, if you invest less in tax-saving schemes, go for the new regime.
That being said, if you already have in place a financial plan for wealth creation by making investments in tax-saving instruments; medical claims and life insurance; making payments of children’s tuition fees; payment of EMIs on education loan; buying a house with a home loan; and so on, the old regime helps you with higher tax deductions and lower tax outgo.
When can I opt for old vs new regime?
| Nature of Income | Time of Selection of option of old vs new regime |
| Income from Salary or any other head of income attracting TDS | At the start of the financial year, an employee has the choice to select the tax regime and inform their employer, whereas the default regime shall be new tax regime. It cannot be modified during the year. However, the option can be modified when filing the Income Tax Return. |
| Income from Business & Profession | In case you have Business or professional income, the choice between tax regimes can only be made once in a lifetime. |
- Income Tax Rate for domestic companies – FY 2023-24
| Particulars | Old regime Tax rates | New Regime Tax rates |
| Company opts for section 115BAB (not covered in sections 115BA and 115BAA) & is registered on or after October 1, 2019, and has commenced manufacturing on or before 31st March 2024 and subject to the conditions specified in the section. Applicable from AY 2020-21 and onwards. | – | 15% |
| Company opts for Section 115BAA, wherein the total income of a company has been calculated without claiming specified deductions, incentives, or exemptions and additional depreciation as specified in the section. Applicable from AY 2020-21 and onwards. | – | 22% |
| The company opts for section 115BA registered on or after March 1, 2016 and engaged in the manufacture of any article or thing and does not claim the deduction as specified in the section. Applicable from AY 2017-18 and onwards. | – | 25% |
| Turnover or gross receipt of the company is less than Rs. 400 crore in the previous year 2020-21 | 25% | 25% |
| Any other domestic company | 30% | 30% |
NOTE:
Additional Health and Education cess at the rate of 4 % will be added to the income tax liability in all cases.
Surcharge applicable for companies is as below:
- 7% of Income tax where total income > Rs 1 crore,
- 12% of Income tax where total income > Rs.10 crore,
- 10% of income tax where domestic company opted for section 115BAA and 115BAB.
- Income tax rate for Partnership firm or LLP as per old/ new regime
A partnership firm/ LLP is taxable at 30%.
NOTE:
- 12% Surcharge is levied on income is more than Rs 1 crore
- Health and Education Cess at the rate of 4% will be applicable
- No concessional rates are introduced for firms LLPs in the next tax regime