The accurate payment of taxes is important as it is the pivotal source of revenue for the Government. This amount collected as tax is used for different public development projects and welfare activities.
Moreover, tax rates are mostly variable in nature and are subject to change based on the new proposition passed by the Government of India. In other words, this means that in every financial year, some changes will be incorporated that taxpayers must be aware of.
Since FY 2023-24 will begin soon, it is important to know the new tax slabs to successfully file income tax. Moreover, knowing the new tax regime will allow taxpayers to know their tax dues before the return filing date.
For FY 2022-23, the taxpayers liable to pay taxes will have to pay the amount in the Assessment Year 2023-24, and so on. So, for the accurate computation of the tax rates for FY 2022-23 and also for the coming FY 2023-24, let's understand the new tax rates for individuals. So, without further adieu, let’s begin!
For FY 2023-24, the new tax regime has been proposed as the default slab. The revised tax rates will be:
Income tax slabs |
Rate of Taxation |
| Up to ₹3,00,000 | Nil |
| Between ₹3,00,001 and ₹6,00,000 | 5% of your total income that exceeds ₹3,00,000 |
| Between ₹6,00,001 and ₹9,00,000 | ₹15,000 + 10% of your total income that exceeds ₹6,00,000 |
| Between ₹9,00,001 and ₹12,00,000 | ₹45,000 + 15% of your total income that exceed ₹9,00,000 |
| Between ₹12,00,001 and ₹15,00,000 | ₹90,000 + 20% of your total income that exceeds ₹12,00,000 |
| More Than ₹15,00,000 | ₹1,50,000 + 30% of your total income that exceeds ₹15,00,000 |
Health and Education cess of 4% is levied on the tax amount calculated above plus surcharge
The Union Budget 2023, presented on February 1, 2023, proposed the following changes in the new tax regime that would be effective from April 1, 2023.
Standard deduction of Rs 15,000 is allowed for family pensioners under the new tax regime.
The Old Tax Regime for FY 2023-24 for resident individuals and HUF below 60 years of age and NRIs is as follows:
|
Income tax slabs |
Rate of Taxation |
|
up to ₹2,50,000 |
Nil |
|
Between ₹2,50,001 and ₹5,00,000 |
5% of your total income that exceeds ₹2,50,000 |
|
Between ₹5,00,001 and ₹10,00,000 |
₹12,500 + 20% of your total income that exceeds ₹5,00,000 |
|
Above ₹10,00,001 |
₹1,12,500 + 30% of your total income that exceeds ₹10,00,000 |
Some key points to remember while computing income tax for the financial year 2023-24 are:
Since the passing of the Finance Act 2020, individuals and HUF have the option of paying taxes under either the old or new tax regimes. The new tax regime allows both resident and non-resident individuals, as well as HUF, to pay taxes at a reduced rate.
Anyone opting for this concessional new tax regime would not be able to claim a number of tax deductions and exemptions. This includes the standard deduction, HRA, LTA, and deductions under Section 80C, Section 24(b), Section 80D, Section 80E, Section 80TTA, Section 80 TTB, etc.
With the FY 2022-23 almost coming to an end, it is your duty as a tax-payer to learn about the applicable income tax slab for this particular year, pay your income taxes and file return before the stipulated date – around July 31st, 2023.
The given tax rates for the new tax regime for FY 2022-23 are valid until 31st March 2023, and must be considered by taxpayers who need to file returns until 31 July 2023 for the FY 2022-23.
|
Income Tax Slabs |
Rate of Taxation |
|
Up to ₹2,50,000 |
Nil |
|
Between ₹2,50,001 and ₹5,00,000 |
5% of your total income that exceeds ₹3,00,000 |
|
Between ₹5,00,001 and ₹7,50,000 |
₹12,500 + 10% of your total income that exceeds ₹5,00,000 |
|
Between ₹7,50,001 and ₹10,00,000 |
₹37,500 + 15% of your total income that exceeds ₹7,50,000 |
|
Between ₹10,00,001 and ₹12,50,000 |
₹75,000 + 20% of your total income that exceeds ₹10,00,000 |
|
Between ₹12,50,001 and ₹15,00,000 |
₹1,25,000 + 25% of your total income that exceeds ₹12,50,000 |
|
Above ₹15,00,000 |
₹1,87,500 + 30% of your total income that exceeds ₹15,00,000 |
For the FY 2022-23, the Income Tax Slab Rates for Individuals and HUF below 60 years of age as per the existing (old) income tax regime are as follows:
|
Income tax slabs |
Rate of Taxation |
|
Up to ₹2,50,000 |
Nil |
|
Between ₹2,50,001 and ₹5,00,000 |
5% of your total income that exceeds ₹2,50,000 |
|
Between ₹5,00,001 and ₹10,00,000 |
₹12,500 + 20% of your total income that exceeds ₹5,00,000 |
|
Above ₹10,00,000 |
₹1,12,500 + 30% of your total income that exceeds ₹10,00,000 |
Under the new tax regime for FY 2023-24, the tax rates are the same for all taxpayers, irrespective of their age, which is as follows.
|
Income tax slabs |
Income tax slabs Rate of Taxation |
|
Up to ₹3,00,000 |
Nil |
|
Between ₹3,00,001 and ₹6,00,000 |
5% of your total income that exceeds ₹3,00,000 |
|
Between ₹6,00,001 and ₹9,00,000 |
₹15,000 + 10% of your total income that exceeds ₹6,00,000 |
|
Between ₹9,00,001 and ₹12,00,000 |
₹45,000 + 15% of your total income that exceed ₹9,00,000 |
|
Between ₹12,00,001 and ₹15,00,000 |
₹90,000 + 20% of your total income that exceeds ₹12,00,000 |
|
More Than ₹15,00,000 |
₹1,50,000 + 30% of your total income that exceeds ₹15,00,000 |
For taxpayers between the age of 60 and 80, the rate of taxation under the old tax regime is the same for both financial years 2022-23 and 2023-24, which is as follows:
|
Income tax slabs |
Rate of Taxation |
|
Up to ₹3,00,000 |
Nil |
|
From ₹3,00,001 – ₹5,00,000 |
5% of your total income that exceeds ₹3,00,000 |
|
From ₹5,00,001 – ₹10,00,000 |
₹10,000 + 20% of your total income that exceeds ₹5,00,000 |
|
Above ₹10,00,000 |
₹1,10,000 + 30% of your total income that exceeds ₹10,00,000 |
Along with this, you will also be levied with an additional 4% Health and Education cess, which is applicable to the tax amount calculated.
For taxpayers above 80 years of age, at any time during the previous year, the rate of taxation under the old tax regime is the same for both financial years 2022-23 and 2023-24, which is as follows:
|
Income tax slabs |
Rate of Taxation |
|
Up to ₹5,00,000 |
Nil |
|
From ₹5,00,001 – ₹10,00,000 |
20% of your total incomes exceeding ₹5,00,000 |
|
Above ₹10,00,001 |
30% of your total income exceeding ₹10,00,000 |
Super-senior citizens are also liable to pay an extra 4% Health and Education Cess on the tax amount calculated.
For the FY 2022-23, the Income Tax Slab Rates under the special (new) tax regime for taxpayers between 60 and 80 years of age and those above 80 years of age is as follows:
|
Income Tax Slabs |
Rate of Taxation |
|
Up to ₹2,50,000 |
Nil |
|
From ₹2,50,001 to ₹5,00,000 |
5% above ₹2,50,000 |
|
From ₹5,00,001 to ₹7,50,000 |
₹12,500 + 10% above ₹5,00,000 |
|
From ₹7,50,001 to ₹10,00,00 |
₹37,500 + 15% above ₹7,50,000 |
|
From ₹10,00,001 to ₹12,50,000 |
₹75,000 + 20% above ₹10,00,000 |
|
From ₹12,50,001 to ₹15,00,000 |
₹1,25,000 + 25% above ₹12,50,000 |
|
More than ₹15,00,000 |
₹1,87,500 + 30% above ₹15,00,000 |
For computation purposes, here are the surcharges that will be followed for assessing tax for both the financial years. These surcharges are for individuals with a taxable income exceeding ₹50 Lakh, effective from April 1, 2023.
Note that before Budget 2023, the highest surcharge on income over ₹5 Crore was 37%, which has been reduced to 25%, effective from April 1, 2023. All the other surcharge rates remain the same for financial years 2022-23 and 2023-24.
|
Taxable Income |
Surcharge |
|
For those with an income above ₹50 Lakh but below ₹1 Crore |
10% |
|
For those with an income of above ₹1 Crore but below ₹2 Crore |
15% |
|
For those with an income of above ₹2 Crore |
25% |
Income Tax Rates in India for Domestic Companies for FY 2022-23 and FY 2023-24
While the above income tax slabs in India are valid for individuals and HUFs, the tax slabs applicable for domestic companies are different. The following tax rates surcharges remain unchanged for financial years 2022-23 and 2023-24.
| Gross turnover particulars | Tax rate FY 2022-23 | Tax rate FY 2023-24 |
| Up to ₹400 Crore for the financial year 2020-21 | 25% | NA |
| More than ₹400 Crore for the financial year 2020-21 | 30% | NA |
| Up to ₹400 Crore for the financial year 2021-22 | NA | 25% |
| More than ₹400 Crore for the financial year 2021-22 |
NA | 30% |
| When the company has opted for Section 115BA | 25% | 25% |
| When the company has opted for Section 115BAA | 22% | 22% |
| When the company has opted for Section 115BAB | 15% | 15% |
Apart from these income tax rates in India, domestic companies will also be levied the following cess and surcharges –
Health and Education Cess – 4%
|
Net income particulars |
Surcharge rate on the income tax amount |
|
For companies whose net income exceeds ₹1 Crore but is less than ₹10 Crore |
7% |
|
For companies whose net income exceeds ₹10 Crore |
12% |
But, it is crucial to remember that this surcharge rate for companies that have opted for taxability under Section 115BAA and Section 115BAB will be 10%, regardless of their total income amount.
Now that we have discussed at length about tax-slabs and the limit for income tax exemptions in India, let us summarise the key points under it.
Salary
Income from House property
Capital gains
Income generated from businesses and other professions
Other income sources include interest earned on fixed deposits and savings accounts, lottery, etc.
With such information at your disposal, the process of evaluating your income tax liabilities can become extremely simple.
So, make sure you look through the tax slabs, determine the one applicable to you, and compute your total tax payable well before this financial year is over to avoid the risks of missing the income tax filing deadline!
If you are a salaried employee, there are several legitimate ways through which you can save tax payment under the Income Tax Act, 1961. Some of the more comprehensive ways to do so include investing in the likes of National Pension Scheme, tax-saving mutual funds, insurance policy premiums, health insurance policies, etc.
Following is an elaboration on a few ways through which you can reduce your income tax liabilities if you are a salaried employee:
Under this section of the Income Tax Act, you can claim various deductions from your total income and reduce your tax payment liability by bringing down your total taxable income.
This section allows a deduction of up to ₹1.5 Lakh of your total taxable income and can be availed by individuals and HUF. Following are a few investment options and schemes for which Section 80C is applicable:
Under Section 80D of the Income Tax Act, 1961, you can avail of a deduction of up to ₹25,000 on your Health Insurance premium payments for self or family. Further, for premium paid for senior citizens, the deduction limit is extended to ₹50,000. For health check-ups, amounting up to ₹5,000 are also allowed for deduction.
Again, if you are paying premiums for both yourself and your senior citizen parents, you can avail of a deduction of up to ₹75,000 on your premiums per annum.
Know more about
There is no upper limit on the deductions that can be claimed for charitable donations. However, there are specific rules that you must adhere to. For instance, in the case of most NGOs, you can avail of a deduction of up to 50% or 100% of the donated amount and up to 10% of your total adjusted income.
Under this section, deductions are available on the interest paid on the EMI of education loans paid for pursuing higher studies. In order to claim this deduction, the loan must be taken from a nationalised or private bank or any financial institution by the individual for himself, his spouse, or children.
Apart from these, you can also consider contributing to the National Pension Scheme, avail deductions on your home rent, deposit in a savings account, etc., to save on your tax payments.
However, don’t forget to look through the details of each of these schemes and investment options before you decide to avail their benefits!
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Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
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