It’s tax season again, and understanding income tax can confuse many people. However, it is essential to stay informed about the latest updates in the income tax slabs to ensure compliance and make informed financial decisions. With the beginning of the Assessment Year (AY) 2023-24, we must familiarise ourselves with the latest income tax slabs and the government’s rates. This blog will review the income tax slabs for salaried individuals for AY 2023-24.
Individuals and HUFs can opt for the Old Tax Regime or the New Tax Regime with a lower rate of taxation (u/s 115 BAC of the Income Tax Act).
Income Tax Slabs for Individuals (resident or non-resident) less than 60 years of age at any time during the previous year:
| Old Tax Regime- Income Tax Slab | Income Tax Rate | New Tax Regime u/s 115BAC - Income Tax Slab | Income Tax Rate |
|---|---|---|---|
| Up to ₹ 2,50,000 | Nil | Up to ₹ 2,50,000 | Nil |
| ₹ 2,50,001 - ₹ 5,00,000 | 5% above ₹ 2,50,000 | ₹ 2,50,001 - ₹ 5,00,000 | 5% above ₹ 2,50,000 |
| ₹ 5,00,001 - ₹ 10,00,000 | ₹ 12,500 + 20% above ₹ 5,00,000 | ₹ 5,00,001 - ₹ 7,50,000 | ₹ 12,500 + 10% above ₹ 5,00,000 |
| Above ₹ 10,00,000 | ₹ 1,12,500 + 30% above ₹ 10,00,000 | ₹ 7,50,001 - ₹ 10,00,000 | ₹ 37,500 + 15% above ₹ 7,50,000 |
| ₹ 10,00,001 - ₹ 12,50,000 | ₹ 75,000 + 20% above ₹ 10,00,000 | ||
| ₹ 12,50,001 - ₹ 15,00,000 | ₹ 1,25,000 + 25% above ₹ 12,50,000 | ||
| Above ₹ 15,00,000 | ₹ 1,87,500 + 30% above ₹ 15,00,000 |
Income Tax Slabs for Individuals (resident or non-resident) 60 years or more but less than 80 years of age anytime during the previous year:
| Old Tax Regime- Income Tax Slab | Income Tax Rate | New Tax Regime u/s 115BAC - Income Tax Slab | Income Tax Rate |
|---|---|---|---|
| Up to ₹ 3,00,000 | Nil | Up to ₹ 2,50,000 | Nil |
| ₹ 3,00,001 - ₹ 5,00,000 | 5% above ₹ 3,00,000 | ₹ 2,50,001 - ₹ 5,00,000 | 5% above ₹ 2,50,000 |
| ₹ 5,00,001 - ₹ 10,00,000 | ₹ 10,000 + 20% above ₹ 5,00,000 | ₹ 5,00,001 - ₹ 7,50,000 | ₹ 12,500 + 10% above ₹ 5,00,000 |
| Above ₹ 10,00,000 | ₹ 1,10,000 + 30% above ₹ 10,00,000 | ₹ 7,50,001 - ₹ 10,00,000 | ₹ 37,500 + 15% above ₹ 7,50,000 |
| ₹ 10,00,001 - ₹ 12,50,000 | ₹ 75,000 + 20% above ₹ 10,00,000 | ||
| ₹ 12,50,001 - ₹ 15,00,000 | ₹ 1,25,000 + 25% above ₹ 12,50,000 | ||
| Above ₹ 15,00,000 | ₹ 1,87,500 + 30% above ₹ 15,00,000 |
Income Tax Slabs for Individuals (resident or non-resident) 80 years of age or more anytime during the previous year:
| Old Tax Regime- Income Tax Slab | Income Tax Rate | New Tax Regime u/s 115BAC - Income Tax Slab | Income Tax Rate |
|---|---|---|---|
| Up to ₹ 5,00,000 | Nil | Up to ₹ 2,50,000 | Nil |
| ₹ 5,00,001 - ₹ 10,00,000 | 20% above ₹ 5,00,000 | ₹ 2,50,001 - ₹ 5,00,000 | 5% above ₹ 2,50,000 |
| Above ₹ 10,00,000 | ₹ 1,00,000 + 30% above ₹ 10,00,000 | ₹ 5,00,001 - ₹ 7,50,000 | ₹ 12,500 + 10% above ₹ 5,00,000 |
| ₹ 7,50,001 - ₹ 10,00,000 | ₹ 37,500 + 15% above ₹ 7,50,000 | ||
| ₹ 10,00,001 - ₹ 12,50,000 | ₹ 75,000 + 20% above ₹ 10,00,000 | ||
| ₹ 12,50,001 - ₹ 15,00,000 | ₹ 1,25,000 + 25% above ₹ 12,50,000 | ||
| Above ₹ 15,00,000 | ₹ 1,87,500 + 30% above ₹ 15,00,000 |
Note:
1. The rates of Surcharge and Health & Education cess are the same under both tax regimes
2. Rebate u/s 87A: Resident Individual whose Total Income is not more than ₹ 5,00,000 is also eligible for a Rebate of up to 100% of income tax or ₹ 12,500, whichever is less. This Rebate is available in both tax regimes.
Surcharge, Marginal Relief and Health & Education Cess
What is Surcharge?
The Surcharge is an additional charge levied for persons earning Income above the specified limits; it is charged on the amount of income tax calculated as per applicable rates
- 10% – Taxable Income above ₹ 50 lakh – up to ₹ 1 crore
- 15% – Taxable Income above ₹ 1 crore – up to ₹ 2 crore
- 25% – Taxable Income above ₹ 2 crore – up to ₹ 5 crore
- 37% – Taxable Income above ₹ 5 crore
- The maximum rate of Surcharge on Income by way of Dividend or Income under the provisions of Sections 111A, 112, and112A is 15%
What is Marginal Relief?
Marginal relief is a Relief from the Surcharge, provided in cases where the Surcharge payable exceeds the additional Income that makes the person liable for the Surcharge. The amount payable as a Surcharge shall not exceed the amount of Income earned exceeding ₹ 50 lakhs, ₹ 1 crore, ₹ 2 crores or ₹ 5 crores, respectively.
What is Health and Education cess?
Health & Education cess @ 4% shall also be paid on the amount of income tax plus Surcharge (if any).
Understanding income tax slabs for AY 2023-24 is crucial to managing your finances effectively and ensuring compliance with tax regulations. By familiarising yourself with the latest slabs and rates, you can make informed decisions to optimise your tax liability and maximise your savings.