Quick glance at the latest Income Tax Slabs for FY 2023-24

Below is a tabular version of the latest income tax slabs applicable for individuals and HUF:

What is the Income Tax Slab?

Income Tax in India follows a tax slab system. Here, taxpayers’ income is categorised as ranges or slabs and certain tax rates are assigned to them. This is a progressive system of taxation where people earning more income are taxed at higher income tax slabs in proportion to their higher income.

By introducing income tax slabs in India, the Government of India aims to achieve a fair taxation system for all citizens. With this aim, the government revises the tax slabs periodically and announces amendments to the Union Budget accordingly.

Now that you know what income tax slabs are, let’s take you through the different slabs under the old and new tax regimes for a better understanding.

For several years, many people purchased life insurance simply as a tax-saving method. The truth is, life insurance plays a crucial role in every sound financial plan. Before we create financial plans for the upcoming financial year, let’s better understand the new rules and regulations. In February 2023, the finance minister outlined the budget for the upcoming year, which included a few changes to the new tax regime. The finance minister reduced the number of tax slabs and extended the standard deduction to the salaried class and pensioners as well.

NOTES:

1. The tax rates in the new tax regime remain the same across all categories, i.e. the Hindu Undivided Family and individuals up to 60 years of age, senior citizens above 60 years to 80 years of age, and super senior citizens above 80 years. Therefore, no increase of the basic exemption limit will benefit the senior and the super senior citizens in the new tax regime.
2. Individuals with a net taxable income of up to ₹ 7 lakh will be eligible for tax rebate u/s 87A under the new tax regime. The rebate limit remains at ₹ 5 lakh for individuals who choose to pay tax under the old regime.

Old Tax Regime

Income Tax Slabs for Individuals and HUF

New Tax Regime

The new tax regime has common tax rates for every individual and HUF taxpayer, unlike the old regime which differentiates taxpayers on the basis of their age. This regime was revamped in the Union Budget 2023. The new tax regime for FY 2023-24 is given below.

3. Surcharge rate for FY 23-24

*Health and Educational cess of 4% tax will be applicable on the sum of income tax liability and surcharges of all cases.

Exceptions for Surcharge Applicability

• The surcharge rates of 25% and 37% will not apply to income that is taxable under 2 these sections-

             Section 111A (Short Term Capital Gains on Shares)

             Section 112A (Long Term Capital Gain on shares) &

             Section 115AD [tax on income of FIIs (Foreign Institutional Investors)]

           Consequently, the highest surcharge applicable to these taxpayers will be 15%.

• Where the amount of surcharge on income tax payable exceeds the increase in income over the specified limit, concept of marginal relief kicks in.

The maximum rate of surcharge on tax payable on income from earnings as dividends or income from capital gains is 15%. Also, the surcharge for the Association of Persons (AOP) which comprises companies will be limited to 15%. These revised surcharged rates will be applicable for AY   2024-25.

Income Tax Slabs for Individuals below 60 years and HUF:

NOTES:

• The exemption limit of income tax is up to ₹ 2.5 lakh for all individuals, HUF and individuals below 60 years and NRIs for FY 2023-24.
• An additional 4% health and education cess is applicable on the tax amount.

Income Tax Slabs for Individuals aged between 60 years and 80 years :

NOTES:

• The exemption limit on income tax is up to ₹3 lakh for senior citizens for FY 2023-24.
• An additional 4% health and education cess is applicable on the tax amount.

Income Tax Slabs for Individuals above 80 years:

NOTES:

• The exemption limit on income tax is up to ₹5 lakh for super senior citizens for FY 2023-24.
• An additional 4% health and education cess is applicable on the tax amount.