In India, income tax is vital to the country’s revenue generation. It is calculated using income tax slabs and rates applicable for each financial year (FY) and assessment year (AY). The income tax slabs are an integral part of the Union Budget and are subject to change with each annual budget announcement.
Income Tax Slab Structure 2023
The income tax slab system categorizes taxpayers into different tax brackets based on income. Individuals with higher incomes fall into higher tax brackets and must pay more taxes. This progressive tax system ensures that those who earn more contribute proportionately higher to the country’s tax revenue.
Income Tax Slabs and Rates for FY 2023-24 in India
For the FY 2023-24 (AY 2024-25), the following are the income tax slabs and rates applicable for individual taxpayers in India:
| Income Range (Rs.) | Tax Rate |
| Up to Rs. 3,00,000 | NIL |
| Rs. 3,00,001 – Rs. 6,00,000 | 5% on income exceeding Rs. 3,00,000 |
| Rs. 6,00,001 – Rs. 9,00,000 | Rs. 15,000 + 10% on income exceeding Rs. 6,00,000 |
| Rs. 9,00,001 – Rs. 12,00,000 | Rs. 45,000 + 15% on income exceeding Rs. 9,00,000 |
| Rs. 12,00,001 – Rs. 15,00,000 | Rs. 90,000 + 20% on income exceeding Rs. 12,00,000 |
| Above Rs. 15,00,000 | Rs. 1,50,000 + 30% on income exceeding Rs. 15,00,000 |
Tax Slabs for Senior Citizens
For senior citizens between 60 to 80 years of age, the income tax slabs for FY 2023-24 are as follows:
| Income Range (Rs.) | Tax Rate |
| Up to Rs. 3,00,000 | NIL |
| Rs. 3,00,001 – Rs. 5,00,000 | 5% on income exceeding Rs. 3,00,000 |
| Rs. 5,00,001 – Rs. 10,00,000 | 20% on income exceeding Rs. 5,00,000 |
| Above Rs. 10,00,000 | 30% on income exceeding Rs. 10,00,000 |
Super Senior Citizens (Above 80 years)
For senior citizens above 80 years of age, the income tax slabs for FY 2023-24 are as follows:
| Income Range (Rs.) | Tax Rate |
| Up to Rs. 5,00,000 | NIL |
| Rs. 5,00,001 – Rs. 10,00,000 | 20% on income exceeding Rs. 5,00,000 |
| Above Rs. 10,00,000 | 30% on income exceeding Rs. 10,00,000 |
Please note that the above tax rates apply to the new tax regime for FY 2023-24. Taxpayers can choose between the new and old tax regimes, depending on their eligibility for deductions and exemptions.
Tax Slabs for Domestic Companies
Domestic companies are taxed based on their turnover or gross receipts in the previous year. The income tax rates for domestic companies for FY 2023-24 are as follows:
- Turnover/gross receipt < Rs. 400 crores: 25%.
- Other Domestic Companies: 30%.
Surcharge and Cess
Additional surcharge rates are applicable for companies with varying income levels. A 4% Health and Education Cess is also levied on the total tax payable.
Tax Slabs for Partnership Firms and LLPs
Partnership firms and Limited Liability Partnerships (LLPs) are taxed at a flat rate of 30% for FY 2023-24. A 12% surcharge is applicable on income above Rs. 1 crore, and a 4% Health and Education Cess is added to the total tax payable.
Comparison Between Old and New Tax Regimes
In FY 2022-23, a new tax regime was introduced alongside the existing old regime. Taxpayers have the option to choose between the two regimes. The key differences between the old and new tax regimes are:
- The new tax regime offers lower tax rates but fewer deductions and exemptions than the old regime.
- Taxpayers opting for the new regime will not be eligible for several deductions, such as Section 80C, 80D, and more, available under the old regime.
Conclusion
In conclusion, understanding India’s income tax slab system is crucial for taxpayers to manage their finances effectively and plan their tax liabilities accordingly. It is essential to assess the advantages and disadvantages of the old and new tax regimes and choose the one that best suits individual financial goals and circumstances. Whether you are an individual or a company, properly comprehending the tax system is essential for efficient ITR filing in 2023.
