Skip to main content

Tax slabs for individuals for AY 2023-24 and 2024-25

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 2023-24 and 2024-25, under both old and new tax regime. 

Previous Year and Assessment Year

  • Previous Year (PY) is the financial year in which the income is earned.
  • Assessment Year (AY) is the financial year in which the income tax return is filed for the income earned in the previous year.

Old and New Tax regime

The new tax regime was introduced by the Finance Act, 2020 as an alternative tax structure. The new regime offered lower income tax rates and more tax slabs, but without the option to avail any tax exemptions and deduction available under the earlier tax structure. The old regime was made the default option, while taxpayers could opt for new tax regime.

As announced by the Finance Minister during the presentation of Union Budget 2023-24, the new income tax regime has been made the default tax regime, however, citizens will continue to have the option to avail the benefit of the old tax regime.

Further, for those person having income under the head “profit and gains of business or profession” and having opted for old regime can revoke that option only once and after that they will continue to be taxed under the new regime. For those not having income under the head “profit and gains of business or profession”, option for old regime may be exercised in each year. 

Income tax rates for individuals (old tax regime)

Income Tax rate (AY 2023-24) Tax rate (AY 2024-25)
Individuals up to the age of 60 years
Up to ₹2.5 Lakh Nil Nil
₹2.5 Lakh to ₹5 Lakh 5% 5%
₹5 Lakh to ₹10 Lakh 20% 20%
Above ₹10 Lakh 30% 30%
Individuals more than 60 years of age
Up to ₹3 Lakh Nil Nil
₹3 Lakh to ₹5 Lakh 5% 5%
₹5 Lakh to ₹10 Lakh 20% 20%
Above ₹10 Lakh 30% 30%
Individuals more than 80 years of age
Up to ₹5 Lakh Nil Nil
₹5 Lakh to ₹10 Lakh 20% 20%
Above ₹10 Lakh 30% 30%

Taxpayers can claim standard deduction of ₹50,000 from salary, deduction up to ₹15,000 from family pension, deductions under Chapter VIA, etc. 

Further, under section 87A, a rebate of ₹12,500 is available to resident individuals whose total income during the previous year does not exceed ₹5 Lakh. That is, if the taxable income is less than ₹5 Lakh, no tax is payable by the individual.

Income tax rates for individuals (new tax regime)

Income
Tax rate
(AY 2023-24)
Income
Tax rate
(AY 2024-25)
Up to ₹2.5 Lakh Nil Up to ₹3 Lakh Nil
₹2.5 Lakh to ₹5 Lakh 5% ₹3 Lakh to ₹6 Lakh 5%
₹5 Lakh to ₹7.5 Lakh 10% ₹6 Lakh to ₹9 Lakh 10%
₹7.5 Lakh to ₹10 Lakh 15% ₹9 Lakh to ₹12 Lakh 15%
₹10 Lakh to ₹12.5 Lakh 20% ₹12 Lakh to ₹15 Lakh 20%
₹12.5 Lakh to ₹15 Lakh 25% Above ₹15 Lakh 30%
Above ₹15 Lakh 30%
Standard deduction not available. Taxpayers can claim standard deduction of ₹50,000 from salary and deduction up to ₹15,000 from family pension.
Under section 87A, a rebate of ₹12,500 is available to resident individuals whose total income during the previous year does not exceed ₹5 Lakh. That is, if the taxable income is less than ₹5 Lakh, no tax is payable by the individual. Under section 87A, a rebate of ₹25,000 is available to resident individuals whose total income during the previous year does not exceed ₹7 Lakh. That is, if the taxable income is less than ₹7 Lakh, no tax is payable by the individual.

Surcharge (old tax regime)

Surcharge on income tax is applicable as follows –

Income
Surcharge
(AY 2023-24)
Surcharge
(AY 2024-25)
₹50 Lakhs to ₹1 Crore 10% 10%
₹1 Crore to ₹2 Crores 15% 15%
₹2 Crores to ₹5 Crores 25% 25%
Exceeding ₹5 Crores 37% 37%

Surcharge (new tax regime)

Surcharge on income tax is applicable as follows –

Income
Surcharge
(AY 2023-24)
Income
Surcharge
(AY 2024-25)
₹50 Lakhs to ₹1 Crore 10% ₹50 Lakhs to ₹1 Crore 10%
₹1 Crore to ₹2 Crores 15% ₹1 Crore to ₹2 Crores 15%
₹2 Crores to ₹5 Crores 25% Exceeding ₹2 Crores 25%
Exceeding ₹5 Crores 37%

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)


References

Government of India. (2023, February 01). 'Budget 2023-2024 - Speech of Minister of Finance'. Retrieved from https://incometaxindia.gov.in/budgets%20and%20bills/2023/budget_speech.pdf

Income Tax Department. (n.d.). 'Tax Rates'. Retrieved from https://incometaxindia.gov.in/Tutorials/2%20Tax%20Rates.pdf


Follow at - Telegram   Instagram   LinkedIn   Twitter

Comments

Popular Posts

Highlights of RBI Annual Report 2023-24 – Chapter 7 to 12

Reserve Bank of India (RBI) has published its annual report for the financial year 2023-24. In a series of articles, we will go through the highlights of the report. This is the fifth and last article in the series.  Chapter 7 – Public Debt Management Ways And Means Advances (WMA) limit for the Government of India (GoI) for H1:2023-24 (April to September 2023) was fixed at ₹1,50,000 crore and for H2:2023-24 (October 2023 to March 2024) was fixed at ₹50,000 crore. RBI issued an ultra-long security of 50-year tenor aggregating ₹30,000 crore to cater to the growing needs of long-term institutional players. Issuance of Sovereign Green Bonds (SGrBs) for an aggregate amount of ₹20,000 crore included maiden issuance of 30-year (₹10,000 crore) SGrB in addition to 5-year (₹5,000 crore) and 10-year (₹5,000 crore) SGrBs. A new 3-year benchmark security was introduced as part of government market borrowing programme during H1:2023-24.  The basket of products offered through the ‘Retail ...

Pre-payment Charges on Loans

Reserve Bank of India (RBI) has issued directions on pre-payment charges on loans. What issues were observed by RBI during supervisory reviews? Divergent practices were observed amongst Regulated Entities (REs) with regard to levy of pre-payment charges in case of loans sanctioned to Micro and Small Enterprises (MSEs) which lead to customer grievances and disputes.  Certain REs were found to include restrictive clauses in loan contracts / agreements to deter borrowers from switching over to another lender, either for availing lower rates of interest or better terms of service. To whom shall the directions be applicable? The directions shall apply to all commercial banks (excluding payments banks), co-operative banks, Non-Banking Financial Companies (NBFCs) and All India Financial Institutions (AIFIs). To which loans shall the direction be applicable? The directions shall be applicable to all floating rate loans and advances sanctioned or renewed on or after January 01, 2026. Which ...

Due Diligence of AePS Touchpoint Operators

Reserve Bank of India (RBI) has issued directions on due diligence of Aadhaar Enabled Payment System (AePS) touchpoint operators. What is Aadhaar Enabled Payment System (AePS)? Aadhaar Enabled Payment System (AePS) is a payment system in which transactions are enabled through Aadhaar number and biometrics / OTP authentication providing financial services such as cash withdrawal, cash deposit, fund transfer, and non-financial services such as mini statement and balance enquiry, etc. AePS is a payment system operated by National Payment Corporation of India (NPCI) that facilitates interoperable transactions using Aadhaar enabled authentication.  What is AePS touchpoint? AePS touchpoint is the terminal deployed by acquirer banks to facilitate AePS transactions, which shall include both mobile and fixed points. Who is AePS Touchpoint Operator (ATO)? AePS Touchpoint Operator (ATO) is the individual onboarded by the acquiring bank who operates the AePS touchpoint. What is the rationale b...

Lending against Gold and Silver collateral

Reserve Bank of India (RBI) has issued directions on lending against the collateral of gold and silver. To whom are the directions applicable? The directions are applicable to the following regulated entities (REs) – Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks, but excluding Payments Banks). Primary (Urban) Co-operative Banks (UCBs) & Rural Co-operative Banks (RCBs), i.e., State Co-operative Banks (StCBs) and Central Co-operative Banks (CCBs). Non-Banking Financial Companies (NBFCs), including Housing Finance Companies (HFCs). Which loans are covered under the directions? The directions shall apply to all loans offered by an RE for the purpose of consumption or income generation (including farm credit) where eligible gold or silver collateral is accepted as a collateral security. What is eligible collateral? Eligible collateral means the collateral of jewellery, ornaments or coins made of gold or silver. A lender shall not grant any ad...

Priority Sector Lending (PSL) guidelines

Reserve Bank of India (RBI) has issued the revised guidelines on Priority Sector Lending (PSL) which has come into effect from April 01, 2025.  To whom does Priority Sector Lending (PSL) guidelines apply? Priority Sector Lending (PSL) guidelines apply to – Commercial Bank [including Regional Rural Bank (RRB), Small Finance Bank (SFB), Local Area Bank (LAB)] Primary (Urban) Co-operative Bank (UCB) other than Salary Earners’ Bank  What are the categories under PSL? The categories under priority sector are as follows – Agriculture Micro, Small and Medium Enterprises Export Credit Education Housing Social Infrastructure Renewable Energy Others What are the PSL targets for banks? The targets and sub-targets set under PSL, to be computed on the basis of the Adjusted Net Bank Credit (ANBC) / Credit Equivalent of Off-Balance Sheet Exposures (CEOBE) as applicable as on the corresponding date of the preceding year are as below – Categories Total Priority Sector A...