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ITR

Income Tax Slab FY 2023-24 and AY 2024-25 (Old and New Regime)

Every year, the finance minister announces income tax slab in India. These slab rates differ for different types of taxpayers. Click here to know ITR Slab Rates in India.

Income Tax Slabs Updates

30th Jan 2023 – Income Tax Slab in India are announced by the finance minister every year. Currently, there are two different Income Tax regimes. Under the new regime, tax benefits cannot be availed. Under the old regime, taxpayers can avail of tax benefits. This year, finance minister Nirmala Sitharaman announced the Union Budget for 2022 on 1 February 2022. In the latest budget, no changes have been proposed for the existing income tax slab and rate.

What Is an ITR Slab?

The income Tax Slab refers to the bracketed system for calculating tax owed by individuals. The amount owed is determined by the individual’s income, with those earning more paying a higher amount. The slab system was established to promote fairness in the tax system and is subject to change during budget announcements.

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Income Tax Slabs Remain Unchanged

In the Union Budget 2022, no alteration was made to the ITR slabs for individuals by Finance Minister Nirmala Sitharaman. However, senior citizens aged 75 and above were given an exemption from filing income tax if their sole source of income was a pension.

New Income Tax Slab for FY 2022 – 2023 (AY 2023 – 2024)

Given below are the various tables for the Revised Income Tax Slabs and rates for the FY 2022 – 2023 and AY 2023 – 2024:

Income Tax Slab Tax Rate
Up to ₹2.5 lakh Nil
Above ₹2.50 – ₹5 lakh 5% of the total income that is more than ₹2.5 lakh
Above ₹5 lakh – ₹7.50 lakh 10% of the total income that is more than ₹5 lakh + ₹12,500
Above ₹7.50 lakh – ₹10 lakh 15% of the total income that is more than ₹7.5 lakh + ₹37,500
Above ₹10 lakh – ₹12.50 lakh 20% of the total income that is more than ₹10 lakh + ₹75,000
Above ₹12.50 – ₹15 lakh 25% of the total income that is more than ₹12.5 lakh + ₹1,25,000
Above ₹15 lakh 30% of the total income that is more than ₹15 lakh + ₹1,87,500

Note: New income tax rates are optional

New Regime Income Tax Slab Rates for Individual

Total Income (Gross) 12 Lakh
Deductions (80C, 80CCD)
HRA
Travel and Medical Allowance
Income that is Taxable ₹12 lakh
Up to ₹2.5 lakh
Above ₹2.50 – ₹5 lakh ₹12,500
Above ₹5 lakh – ₹7.50 lakh ₹25,000
Above ₹7.50 – ₹10 lakh ₹37,500
Above ₹10 lakh – ₹12.50 lakh ₹40,000
Total Tax that must be Paid ₹1,15,000

Things You Must Keep In Mind Before Opting for New Tax Slab

Consider these points before choosing the new Income tax slab:

    1. If you are an individual or part of a Hindu Undivided Family (HUF) without any business income, the option can be made before the start of each financial year.
    2. Once you choose the new Income Tax Slab regime, you cannot change it for that financial year. However, if you withdraw your option for the new regime and switch back to the old one, you may opt for the new regime again later in the same financial year.

Income Tax Slabs & Rates as Per Old Regime FY 2022 – 2023

Income Tax Slab for Senior and Super Senior Citizens FY 2022-23 AY 2023-24

Given below are the three tables for the alternative ITR Slabs:

  • Income Tax Slab for Individuals Who Are Below 60 Years

ITR Slabs Tax Rate
Up to ₹2.5 lakh Nil
Above ₹2.50 lakh – ₹5.00 lakh 5% of the total income that is more than ₹2.5 lakh + 4% cess
Above ₹5 lakh – ₹10 lakh 20% of the total income that is more than ₹5 lakh + ₹12,500 + 4% cess
Above ₹10 lakh 30% of the total income that is more than ₹10 lakh + ₹1,12,500 + 4% cess

Individuals who have an income of less than ₹5 lakh are eligible for tax deductions under Section 87A

Example of How Income Tax is Calculated under the Old Regime for 3 Individuals (A, B, and C)

Components A B C
Annual Salary (₹) 5,00,000 10,00,000 15,00,000
Standard Deduction (₹) 50,000 50,000 50,000
Tax deductions under Section 80C of the Income Tax Act (₹) 70,000 1,50,000 1,50,000
House Rent Allowance deductions 82,000 90,000 1,40,000
Gross total income after deductions (₹) 2,88,000 7,00,000 11,50,000

Computation of Tax on the Gross Total Income

Up to ₹2.5 lakh (₹) Nil Nil Nil
From ₹2,50,001 to ₹5 lakh (₹) 1,900 12,500 12,500
From Rs,5,00,001 to ₹10 lakh (₹) 40,000 1,00,000
Above ₹10 lakh (₹) 45,000
Total Tax (₹) 1,900 52,500 1,57,500
Deductions under Section 87A (₹) 1,900 Nil Nil
Additions of cess (₹) Nil 2,100 6,300
Total tax that is payable (₹) (Total Tax + cess – Deductions under Section 87A) Nil 54,600 1,63,800
  • Income Tax Slab Between 60-80 Years (Senior Citizen)

Income Tax Slabs Tax Rate
Up to ₹3 lakh Nil
Above ₹3.00 lakh – ₹5.00 lakh 5% of the total income that is more than ₹3 lakh + 4% cess
Above ₹5.00 lakh – ₹10 lakh 20% of the total income that is more than ₹5 lakh + ₹10,500 + 4% cess
Above ₹10 lakh 30% of the total income that is more than ₹10 lakh + ₹1,10,000 + 4% cess

Given below is an Example of How Income Tax is Calculated for 3 Individuals (A, B, C)

Components A B C
Annual Salary (₹) 5,00,000 10,00,000 15,00,000
Standard deduction (₹) 50,000 50,000 50,000
Tax deductions under Section 80C of the Income Tax Act (₹) 70,000 1,50,000 1,50,000
House Rent Allowance deductions 82,000 90,000 1,40,000
Gross total income after deductions (₹) 2,88,000 7,00,000 11,50,000

Computation of Tax on the Gross Total Income

Up to ₹3 lakh (₹) Nil Nil Nil
From ₹3,00,001 to ₹5 lakh (₹) Nil 10,500 10,500
From Rs,5,00,001 to ₹10 lakh (₹) 40,000 99,500
Above ₹10 lakh (₹) 45,000
Total Tax (₹) Nil 50,500 1,55,000
Deductions under Section 87A (₹) Nil Nil Nil
Additions of cess (₹) Nil 2,020 6,200
Total tax that is payable (₹) Nil 52,520 1,61,200
  • Income Tax Slabs for Individuals Above 80 Years (Super Senior Citizen)

Income Tax Slabs Tax Rate
Up to ₹5 lakh Nil
Above ₹5 lakh – ₹10 lakh 20% of the total income that is more than ₹5 lakh + 4% cess
Above ₹10 lakh 30% of the total income that is more than ₹10 lakh + ₹1,00,000 + 4% cess

Given Below Is an Example of How Income Tax Is Calculated for 3 Individuals (A, B, C)

Components A B C
Annual Salary (₹) 5,00,000 10,00,000 15,00,000
Standard deduction (₹) 50,000 50,000 50,000
Tax deductions under Section 80C of the Income Tax Act (₹) 70,000 1,50,000 1,50,000
House Rent Allowance deductions 82,000 90,000 1,40,000
Gross total income after deductions (₹) 2,88,000 7,00,000 11,50,000

Computation of Tax on the Gross Total Income

Up to ₹5 lakh (₹) Nil Nil Nil
From Rs,5,00,001 to ₹10 lakh (₹) 40,000 1,00,000
Above ₹10 lakh (₹) 45,000
Total Tax (₹) Nil 40,000 1,45,000
Deductions under Section 87A (₹) Nil Nil Nil
Additions of cess (₹) Nil 1,600 5,800
Total tax that is payable (₹) Nil 41,600 1,50,800

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

Turnover Tax Rate
Gross turnover can be a maximum of ₹250 crores for the previous year 25%
Gross turnover is more than ₹250 for the previous year 30%

Apart from the above-mentioned tax rate, an additional surcharge and cess are levied. Given below are the details of the surcharge and the cess that will be levied:

  • Cess: 4% of corporate tax
  • Surcharge: In case the taxable income is more than ₹1 crore but less than ₹10 crore, the surcharge that will be levied is 7%. In case the taxable income is more than ₹10 crores, the surcharge that will be levied is 12%.
  • Non-resident Indians: For non-resident Indians, irrespective of their age, the exemption limit is up to ₹2.5 lakh.

Important Points

  • In case your net income is more than ₹50 lakh but less than ₹1 crore, apart from a 4% cess, a 10% surcharge is also levied. If the net is above ₹1 crore, a 15% surcharge is levied.
  • Compared to last year’s budget, the cess has increased from 3% to 4%.

Surcharge Rates Applicable to Income Tax

When an assessee’s income exceeds the limits specified by the Income Tax Department, a surcharge is levied on the amount of the income tax. The rates for a surcharge are listed below:

Income Tax Slab Rate For Assessment Year 2022-23

Range of Income Applicable Rate of Surcharge
₹50 lakhs to ₹1 crore 10%
₹1 crore to ₹2 crore 15%
₹2 crore to ₹5 crore 25%
₹5 crore to ₹10 crore 37%
More than ₹10 crore 37%

ITR Slab Rate For Assessment Year 2023-24

Range of Income Applicable Rate of Surcharge
₹50 lakhs to ₹1 crore 10%
₹1 crore to ₹2 crore 15%
₹2 crore to ₹5 crore 25%
₹5 crore to ₹10 crore 37%
More than ₹10 crore 37%

Time to Choose Between the New and Old Regime 

Type of Income  When choosing between the Old and New Regimes 
Salary income or any other type of income that triggers TDS  An employee can opt for the new tax regime at the beginning of the financial year. However, once chosen they cannot revert back to the old regime and can only change the option of selecting the tax regime at the beginning of the new financial year 
Income from Profession and Business   In case of income from profession and business, the option to choose between the tax regimes is available only once. 

New Income Tax Slab Rates for Domestic Companies

Type   Old regime Tax rates  New Regime Tax rates 
Company chooses section 115 BAB and is registered on or after 1 October 2019 and has commenced manufacturing on or before 31 March 2023.  –  15% 
Company chooses Section 115 BAA, wherein the total income of a company has been calculated where specified deductions, incentives, exemptions and additional depreciation have not been claimed  –  22% 
Company chooses section 115BA registered on or after 1 March 2016 and are engaged in manufacture of any item and no deduction claim as specified in the section clause has been made.  –  25% 
If a company’s turnover is less than ₹ 400 crore in the previous year 2018-19  25%  25% 
Any other domestic company  30%  30% 

Income Tax Slab FAQs

Is ITR mandatory if income is less than 5 lakhs?

No, Income up to 5 lakh is not tax-free. Individuals earning up to 2.5 lakh are exempt from paying tax.

How is the Income Tax Slab calculated?

The calculation of income tax slab is based on the taxable income of an individual or entity. The taxable income is calculated by subtracting exemptions, deductions, and rebates from the total income. The resulting amount is then compared to the applicable tax slab rates, which vary based on the individual's residential status and the financial year, to determine the tax owed. The tax slab rates can range from 0% to 30% for individuals and entities, with higher slab rates for those earning higher taxable incomes.

How much Income is Taxable?

The amount of income that is taxable depends on several factors, including the individual's residential status and the exemptions, deductions, and rebates available under tax laws. In general, all sources of income, including salary, business and professional income, capital gains, and rental income, are considered taxable. However, certain types of income may be exempt from tax or eligible for deductions, reducing the amount of taxable income. The exact amount of taxable income will depend on an individual's specific financial situation and is calculated by subtracting the applicable exemptions, deductions, and rebates from the total income.

How can I reduce my Taxable Income?

You can reduce your taxable income by taking advantage of exemptions, deductions, and rebates available under tax laws. Some common ways to reduce taxable income include: Investing in tax-saving instruments such as Public Provident Fund (PPF), Equity-Linked Saving Scheme (ELSS), National Pension Scheme (NPS), etc. Claiming standard deductions and exemptions, such as house rent allowance (HRA), medical expenses, and children's education expenses. Incurring expenses that are eligible for tax deductions, such as tuition fees, home loan interest, insurance premium, etc. Making donations to eligible charitable organizations, which can also result in tax deductions. Opting for the new Income Tax Slab regime, which may result in lower tax liability.


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