The Union Budget is announced by the Government of India in the month of February every year. Apart from providing report of incomes and expenditures of the Government, announcing future projects and allocating funds to various sectors, the budget statement also talks about the changes in tax laws. Here, we will see the income tax rates applicable to individuals for the assessment years 2022-23 and 2023-24, under both old and new regime.
Previous Year and Assessment Year
- Previous year is the financial year in which we earn income.
- Assessment year is the financial year in which we file income tax return for the income earned in the previous year.
Income tax rates for individual up to the age of 60 years (old tax regime)
| Income | Tax rate |
| Up to Rs.2,50,000 | Nil |
| Rs.2,50,001 to Rs.5,00,000 | 5% |
| Rs.5,00,001 to Rs.10,00,000 | 20% |
| Above Rs.10,00,000 | 30% |
Income tax rates for individual more than 60 years of age (old tax regime)
| Income | Tax rate |
| Up to Rs.3,00,000 | Nil |
| Rs.3,00,001 to Rs.5,00,000 | 5% |
| Rs.5,00,001 to Rs.10,00,000 | 20% |
| Above Rs.10,00,000 | 30% |
Income tax rates for individual more than 80 years of age (old tax regime)
| Income | Tax rate |
| Up to Rs.5,00,000 | Nil |
| Rs.5,00,001 to Rs.10,00,000 | 20% |
| Above Rs.10,00,000 | 30% |
Income tax rates for individual (new tax regime)
| Income | Tax rate |
| Up to Rs.2,50,000 | Nil |
| Rs.2,50,001 to Rs.5,00,000 | 5% |
| Rs.5,00,001 to Rs.7,50,000 | 10% |
| Rs.7,50,001 to Rs.10,00,000 | 15% |
| Rs.10,00,001 to Rs.12,50,000 | 20% |
| Rs.12,50,001 to Rs.15,00,000 | 25% |
| Above Rs.15,00,000 | 30% |
Under section 87A, a rebate of Rs.12,500 is available to resident individuals whose total income during the previous year does not exceed Rs.5,00,000. That is, if the taxable income is less than Rs.5,00,000, no tax is payable by the individual.
Surcharge
Surcharge on income tax is applicable as follows –
| Income | Surcharge |
| Rs.50 Lakhs to Rs.1 Crore | 10% |
| Rs.1 Crore to Rs.2 Crores | 15% |
| Rs.2 Crores to Rs.5 Crores | 25% |
| Exceeding Rs.5 crores | 37% |
At any time, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income by more than the amount of income that exceeds the slab for surcharge. For eg, in case where net income exceeds Rs.50 lakh but doesn't exceed Rs.1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs.50 Lakh by more than the amount of income that exceeds Rs.50 Lakhs.
Health and Education Cess
Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.
Total Tax liability
Total Tax Liability = (Income tax as per applicable slab rates) + (Surcharge on Income tax) + (Health and Education cess on Income Tax plus Surcharge)
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