Income Tax Slabs for FY 2023-24 & FY 2022-23 (Old & New Regimes)
Income Tax Slabs for FY 2023-24 & FY 2022-23 (Old & New Regimes)
In India, income tax is levied on income earned by individuals, HUFs, limited liability partnerships (LLPs), partnership firms and corporates. For individuals and HUFs, income tax is calculated using income tax slabs and their corresponding rates. Every year in the Union Budget, the finance minister announces if there are any changes in these tax slabs and rates, which impacts all the taxpayers.
In the Union Budget, our current Finance Minister, Ms Nirmala Sitharaman, announced new income tax slabs in 2023 under the new tax regime. The announced changes will be applicable for the financial year (FY) 2023-24 from 1st April 2023. Both the new and the old tax regime have their benefits and drawbacks, and the taxpayers must weigh and choose the one best suited for them. The government has made the new tax regime the default option for individual taxpayers and HUF.
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Income Tax Slabs in India
As per the Indian Income Tax Act 1961, an individual or a HUF must pay taxes on the income or profits earned by them during a financial year. The taxable income is derived after certain deductions (if any). The government created different tax slabs to categorise individuals based on their income. All eligible individuals must pay taxes based on the tax slab they fall under. For example, an individual with a higher income would fall under a tax slab with a higher income tax rate, thus paying a higher tax, and vice versa. Thus, the slab system was introduced for a fair and progressive individual tax payment structure.
The finance minister may announce changes in the tax slabs in the Union Budget based on various economic factors. As a result, the income tax slabs for new and old regimes are different. In addition, the old regime tax slab rates also differ for different categories of individual taxpayers, whereas for the new regime, there are no such categories. The categories of individual taxpayers include:
Resident individuals (aged less than 60 years) and non-residents
Resident Senior citizens (60 to 80 years of age)
Resident Super senior citizens (aged more than 80 years)
Income Tax Slab Rates under Old Tax Regime for FY 2022-23 (AY 2023-24)
As mentioned above, old regime tax slab rates are different for different categories of individual taxpayers.
Income tax slabs for an individual below 60 years & HUF
Income Tax Slab | Tax Rate |
---|---|
Up to ₹ 2.5 lakh | NIL |
₹ 2.50 lakh - ₹ 5.00 lakh | 0.05 |
₹ 5.00 lakh – ₹ 10.00 lakh | 0.2 |
> ₹ 10.00 lakh | 0.3 |
Income tax slabs for senior citizens above 60 years & below 80 years
Income Tax Slab | Tax Rate |
---|---|
₹ 0 – ₹ 3.00 lakh | NIL |
₹ 3.00 lakh – ₹ 5.00 lakh | 0.05 |
₹ 5.00 lakh – ₹ 10.00 lakh | 0.2 |
> ₹ 10.00 lakh | 0.3 |
Income tax slabs for super senior citizens above 80 years
Income Tax Slab | Tax Rate |
---|---|
₹ 0 – ₹ 5.00 lakh | NIL |
₹ 5.00 lakh – ₹ 10.00 lakh | 0.2 |
> ₹ 10.00 lakh | 0.3 |
Income Tax Slab Rates under New Tax Regime for FY 2022-23 (AY 2023-24)
The new tax regime was announced in the Budget of 2020 and, since then, has gained a lot of attention. This is because the exemptions and deductions applicable to the old regime were foregone under the new regime. However, the tax slabs remain the same across the categories of individual taxpayers, and no classification is made based on age.
Income Tax Slab | Tax Rate |
---|---|
Up to ₹ 2.5 lakh | NIL |
₹ 2.50 lakh - ₹ 5.00 lakh | 0.05 |
₹ 5.00 lakh – ₹ 7.50 lakh | 10% |
₹ 7.50 lakh – ₹ 10.00 lakh | 15% |
₹ 10.00 lakh – ₹ 12.50 lakh | 20% |
₹ 12.50 lakh – ₹ 15.00 lakh | 25% |
> ₹ 15.00 lakh | 30% |