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

Report of the Committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the Financial Sector

Reserve Bank of India (RBI) has released the report of the committee to develop a framework for responsible and ethical enablement of artificial intelligence (FREE-AI) in the financial sector. Committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the Financial Sector In the financial sector, Artificial Intelligence (AI) has the potential to unlock new forms of customer engagement, enable alternate approaches to credit assessment, risk monitoring, fraud detection, and offer new supervisory tools. At the same time, increased adoption of AI could lead to new risks like bias and lack of explainability, as well as amplifying existing challenges to data protection, cybersecurity, among others. To encourage the responsible and ethical adoption of AI in the financial sector, the committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the Financial Sector (Chairperson: Dr. Pushpak B...

Continuous Clearing and Settlement on Realisation in Cheque Truncation System (CTS)

Reserve Bank of India (RBI) has issued direction on continuous clearing and settlement on realisation in Cheque Truncation System (CTS). What is Cheque Truncation System (CTS)? Cheque Truncation System (CTS) involves halting the physical movement of the cheque and its replacement by images of the instrument and the corresponding data contained in the MICR line.  In CTS, 3 images are taken of each cheque – front Gray Scale, front Black & White and back Black & White. MICR (Magnetic Ink Character Recognition) is a 9-digit code printed at the bottom of cheques using magnetic ink – first 3 digits indicate City Code, middle 3 digits indicate Bank Code and the last 3 digits indicate Bank Branch Code. Only CTS-2010 standards compliant instruments can be presented for clearing through CTS. The presenting banks which truncates the cheques need to preserve the physical instruments for 10 years. From when will the continuous clearing and settlement on realisation in CTS be implemented...

What is KYC?

Be it opening a new bank account, applying for a new credit card, registering for new e-wallet, or any other account or facility involving financial matters, the application process is incomplete until KYC is done.  What is KYC? KYC or Know Your Customer is a process of customer identification and verification while opening an account or undertaking a financial transaction. Why is KYC process needed? To prevent money laundering To combat financing of terrorism What is verified under KYC? The banks / financial institutions collect the relevant documents from the customers to verify the following – Proof of identity Proof of address Which documents can be collected for KYC? As per RBI’s Master Direction - Know Your Customer (KYC) Direction, 2016 (Updated as on May 10, 2021), “Officially Valid Document” (OVD) means – Passport Driving licence Proof of possession of Aadhaar number Voter's Identity Card issued by the Election Commission of India Job card issued by NREGA duly signed by an...

Non-Fund Based Credit Facilities

Reserve Bank of India (RBI) has issued directions on non-fund based credit facilities. To whom shall the directions be applicable? The directions shall apply to the following Regulated Entities (REs) for all their Non-Fund Based (NFB) exposures such as guarantee, letter of credit, co-acceptance etc. Commercial Banks (including Regional Rural Banks and Local Area Banks) Primary (Urban) Co-operative Banks (UCBs) / State Co-operative Banks (StCBs) / Central Co-operative Banks (CCBs) All India Financial Institutions (AIFIs) Non-Banking Financial Companies (NBFCs) including Housing Finance Companies (HFCs) in Middle Layer and above, only for the issuance of Partial Credit Enhancement. The directions shall not apply to the derivative exposures of a RE. Which NFB facilities are permitted to be issued by RE? RE shall issue a NFB facility only on behalf of a customer having funded credit facility from the RE. However, this shall not be applicable in respect of – Derivative contracts entered int...

Committees to be constituted by NBFC-BL

Non-Banking Financial Companies (NBFCs) are required to constitute various committees for effective corporate governance. This article lists out some of the important committees to be constituted by the Base Layer NBFCs (NBFC-BL). Board of Directors Applicability Companies Act, 2013 Section 149(1) – Every company shall have a Board of Directors. Composition of the Board Companies Act, 2013 Section 149(1) – The Board of Directors shall consist of individuals as directors – Public company – minimum 3 directors Private company – minimum 2 directors One Person Company – minimum 1 director  Maximum 15 directors (more than 15 directors may be appointed after passing a special resolution) Section 149(4) – Every listed public company shall have at least 1/3rd of the total number of directors as independent directors. Companies (Appointment and Qualifications of Directors) Rules, 2014 Rule 3 – The following companies shall appoint at least 1 woman director – Every listed company Every other...