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New Income Tax Slabs FY 2023-24: Understanding India’s Tax System

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New Income Tax Slabs FY 2023-24

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 receipt in the previous year. The income tax rates for domestic companies for FY 2023-24 are as follows:

  1. Turnover/gross receipt < Rs. 400 crores: 25%.
  2. 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:

  1. The new tax regime offers lower tax rates but fewer deductions and exemptions than the old regime.
  2. 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. Seek guidance from professionals like Kanakkupillai to navigate the complexities and make informed tax planning and compliance decisions.

FAQs – Income Tax Slabs and Rates FY 2023-24

1. What are income tax slabs and rates for FY 2023-24 in India?

The income tax slabs and rates for FY 2023-24 (Assessment Year 2024-25) in India are as follows:

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

 

2. How are senior citizens taxed under the new income tax regime for FY 2023-24?

For senior citizens aged 60 to 80 years, 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

 

3. What are the income tax slabs for super senior citizens (above 80 years) for FY 2023-24?

For super 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

 

4. Are there any differences between the old and new tax regimes for FY 2023-24?

Yes, there are differences between the old and new tax regimes for FY 2023-24. The new tax regime offers lower tax rates, but taxpayers opting for it must forgo certain deductions and exemptions available under the old regime. In contrast, the old tax regime has higher tax rates but provides more opportunities for deductions, such as Section 80C, 80D, and others.

5. What deductions are allowed under the new tax regime for FY 2023-24?

Under the new tax regime, certain deductions are allowed, including:

  • Investment in Notified Pension Scheme under Section 80CCD(2)
  • Conveyance allowance for expenditure incurred for travelling to work
  • Depreciation under Section 32, except additional depreciation
  • Deduction for employment of new employees under Section 80JJAA
  • Any allowance for travelling for employment or on transfer
  • Transport allowance for specially-abled people
6. Can taxpayers choose between the old and new FY 2023-24 tax regimes?

Yes, taxpayers can choose between the old and new FY 2023-24 tax regimes. Depending on their eligibility for deductions and exemptions, they can select a better regime that suits their financial goals and circumstances. However, once a choice is made for a particular FY, it cannot be changed during the same assessment year.

7. What is the additional surcharge and Health & Education Cess applicable to FY 2023-24 companies?

For domestic companies, an additional surcharge is applicable based on their total income:

  • 7% of income tax if the total income is more than Rs. 1 crore
  • 12% of income tax if the total income is more than Rs. 10 crores
  • 10% of income tax if the company opts for Section 115BAA and 115BAB

Additionally, all companies are subject to a Health & Education Cess at 4% of the total tax payable.

8. How is business income taxed for FY 2023-24?

Business income is taxed based on the presumed or real income generated by the profession or business after adjusting for permitted deductions. The applicable tax rates for individual and corporate business income are as per the income tax slabs and rates for FY 2023-24.

9. What is capital gains income, and how is it taxed for FY 2023-24?

Capital gains income is generated from selling assets such as real estate, stocks, gold, mutual fund units, etc. It can be classified as long-term or short-term capital gains based on the asset type and holding period. The capital gains tax rates for FY 2023-24 are separate from the income tax slabs and rates.

10. How much income is tax-free in India?

In India, the income tax law sets a specific limit known as the basic exemption limit, below which taxpayers are not required to pay taxes. This limit varies depending on the category of taxpayers. The basic exemption limit for individuals below 60 years of age is Rs. 2.5 lakh, meaning they are not liable to pay taxes on income up to this amount. Individuals between 60 and 80 have a higher exemption limit of Rs. 3 lakhs, while individuals above 80 enjoy the highest exemption limit of Rs. 5 lakhs.

Under the new tax regime, the basic exemption limit for all individuals is Rs. 2.5 lakh, regardless of their age. This means that under the new regime, all taxpayers are not required to pay taxes on income up to Rs. 2.5 lakh.

11. Will my income be taxed if I am an agriculturist?

As an agriculturist, any income derived from agricultural or allied activities will be exempt from taxation. However, this income will be considered for determining the applicable tax rate when calculating taxes on any non-agricultural income you may have. In essence, agricultural income is tax-free, but it is considered for determining the tax rate on other taxable sources of income.

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