Income Tax Slabs for 2022-2023

Indian Income Tax Slabs for the year 2022 to 2023: Find out the new rates of income tax in India.

Overview

An income tax slab for is a tax levied by the government on individuals or entities (companies and trusts) that earn income from various sources. The tax is levied on the total income of the taxpayer, minus any deductions and exemptions.

Income tax is typically progressive, meaning that higher earners pay a higher rate of tax. The rate of tax increases as the taxpayer’s income increases. There are different income tax brackets in India for different levels of income.

Those with an annual income of ₹ 5-10 lakh are in the third bracket, and they are liable for a tax rate of 30%. Finally, those with an annual income of more than ₹ 10 lakh are in the fourth bracket and they are liable for a tax rate of 40%.

There are also some additional taxes that apply to certain taxpayers. For example, those who earn income from dividends are liable for a dividend distribution tax (DDT) at a rate

Rules and Regulations on Income Tax Slabs in India

• The Income Tax return in India is a tax levied on the income of individuals and entities. The Income Tax Act, of 1961 governs the levy, collection, and recovery of income tax.
• In India, there are different income tax slabs for different categories of taxpayers. The tax slab for an individual taxpayer may also vary depending on their age and gender.
• The Income Tax Act provides for various deductions and exemptions from taxes. These deductions and exemptions are available for certain categories of taxpayers such as senior citizens, women taxpayers, farmers, etc.
• The Income Tax Department is responsible for the assessment and collection of income tax in India. The department has a network of offices across the country to administer income tax for pensioners

Taxable and Non-taxable Income

There are two types of income in India – taxable and non-taxable. Taxable income is subject to income tax, while non-taxable income is not.

Income from salaries, wages, commissions, bonuses, tips, pensions, and rents is taxable. Income from interests, dividends, and capital gains is also taxable. However, there are some exceptions. For example, interest on certain government bonds is exempt from taxation.

Sources of Taxable Income Include Lottery Winnings and Gifts.

Self Assessment of Income Tax in India

In India, individuals who earn income from salaries, pensions, interest, dividends, and other sources are required to file an annual self-assessment tax return. This return must be filed by the due date, which is usually 31 July.

Individuals who are residents of India are taxed on their global income. This means that income earned from sources outside of India is also subject to Direct Tax in India. Non-residents are only taxed on income earned from Indian sources.

The Income Tax Act of 1961 lays out the Income Tax Slabs for both residents and non-residents. The slabs for residents are as follows:

• Income up to ₹2.5 lakhs – No tax
• Income between ₹2.5 lakhs and ₹5 lakhs – 5% tax
• Income between ₹5 lakhs and ₹10 lakhs – 20% tax
• Income above ₹10 lakhs – 30% tax

For non-residents, the Income Tax Slabs are as follows:

Income up to ₹2.5 lakhs – No tax

Income between ₹2.5 lakhs and ₹5 lakhs – 10% tax

Precision in every calculation – our Income Tax Calculator guarantees financial accuracy.

Introduction to Slabs

In India, income tax is levied on individuals, Hindu Undivided Families, companies, firms, and any other legal entity. The Income Tax Act of 1961 governs the levy, collection, and recovery of income tax in India. The Income Tax Department is responsible for the administration of income tax in India.

Income tax is imposed on the total income of an individual. Income from salary, business or profession, capital gains, and other sources are included in the total income. Income from agriculture is exempt from tax.

The Income Tax Act provides for different tax rates for different categories of taxpayers. Individuals are divided into three categories for taxation purposes – men, women, and senior citizens. The tax rates for these categories are different. Companies are also taxed at different rates depending on their turnover.

What Are the Slabs for the Years 2022 to 2023?

• Income Tax Slab for Individual Taxpayers & HUFs (Less than 60 Years Old)
• Income up to ₹2,50,000-No tax is payable
• Income between ₹2,50,001 to ₹5,00,000-5% of total income exceeding ₹2,50,000
• Income between ₹5,00,001 to ₹10,00,000-20% of total income exceeding ₹5 lakh
• Income Tax Slab for Individual Taxpayers & HUFs (Above 60 Years Old)
• Income up to ₹3,00,000- No tax is payable
• Income between ₹3,00,001 to ₹5,00,000-5% of total income exceeding ₹3,00,000
• Income between ₹5,00,001 to ₹10,00,000-20% of total income exceeding ₹5 lakh

Corporate Tax

The corporate tax rate in India is 30%. This rate applies to both domestic and foreign companies. Companies that have an annual turnover of more than ₹1 crore are required to pay corporate tax.

The corporate tax rate was reduced from 30% to 25% in the 2019 budget. However, this reduction is only applicable to companies with an annual turnover of less than ₹400 crores.

Companies that are required to pay corporate tax must file their returns by the 31st of March each year. They can file their returns electronically or through a paper return.

Payments of corporate tax for NRI can be made online or through challans at authorized banks.

Concessions, Exemptions, and Deductions

There are a number of concessions, exemptions, and deductions available under the income tax laws in India. These can help to reduce the amount of tax that an individual is liable to pay.

Some of the common concessions and exemptions include deductions for medical expenses, interest on home loans, and charitable donations. There are also a number of deductions available for individuals who have invested in certain specified investments, such as life insurance policies and pension plans.

In addition to Vakilsearch, there are a number of other concessions and exemptions that may be available. It is advisable to consult with a tax advisor to determine which ones may be applicable in your specific case.

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

India offers two income tax regimes: the old regime and the new regime. Each has different income slabs and tax rates.

Note:

“All” in the old tax regime refers to individuals below 60, those aged 60-80, and those above 80.

The new tax regime has a single slab structure for all taxpayers.

Income Tax Slab Rates For FY 2022-23 (AY 2023-24) 

New Tax regime until 31st March 2023 

The Indian government introduced a new income tax regime, offering a simpler tax structure with fewer deductions but lower tax rates. Here’s a breakdown of the income slabs and corresponding tax rates under the new regime:

If your total income is below Rs. 5 lakh, you can avail a tax rebate of up to Rs. 12,500. This benefit is not available to non-resident Indians (NRIs).

Old Tax regime                                    

Income Tax Slabs for Individuals Below 60 Years & HUF

Note:

• The income tax exemption limit for individuals, HUFs below 60 years, and NRIs is up to Rs 2,50,000.
• Surcharge and cess will be applicable.

Income Tax Slabs in AY 2023-24 (FY 2022-23) for Super Senior Citizens 

Super senior citizens, aged 80 and above, enjoyed a higher tax-free income threshold of Rs. 5 lakh under the old income tax regime for the financial year 2022-23. However, this age-based tax relief has been eliminated in the new tax regime, despite offering lower overall tax rates for the financial year 2023-24. The table below outlines the income tax brackets and rates applicable to super senior citizens in the previous financial year.

In addition to the income tax calculated using the tax slabs for FY 2022-23, you’ll also need to pay a 4% health and education cess.

Income Tax Slab for Individuals Aged Above 60 Years to 80 Years 

NOTE:

• Senior citizens (aged 60 to 80) enjoy a higher tax-free income limit of Rs. 3 lakh.
• Additional taxes, such as surcharge and cess, may apply to the calculated income tax amount. 

Revised Income Tax Slab Rate AY 2024-25 (FY 2023-24)– For New Regime 

How to Calculate Income Tax from Income Tax Slabs? 

Aditya’s total taxable income for the financial year 2023-24 comes to Rs. 9,50,000. This figure encompasses all his income sources, including salary, rental property earnings, and interest. Deductions allowed under Section 80 have already been accounted for. Aditya seeks to determine his tax liability under the old tax regime for the assessment year 2024-25.

Please note that Aditya is an individual taxpayer entitled to a basic income tax exemption of Rs. 2,50,000. However, this threshold is higher for senior citizens (Rs. 3,00,000) and super senior citizens (Rs. 5,00,000).

Importantly, taxpayers with a net taxable income of Rs. 5 lakh or less qualify for a tax rebate under Section 87A of the Income Tax Act, leading to a nil tax liability when opting for the old tax regime.

Consequences of Not Filing the Return Within the Due Date for AY 2024-25 

Opting for the new tax regime after failing to file a return by the due date necessitates sacrificing specific exemptions and deductions available in the old regime.

Frequently Asked Questions

Also Read:

• How to Pay Taxes as Per New Income Tax Slab?
• Types of Income Receivable By a Minor
• Professional Tax Rates in India