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New Income Tax Slab for FY 2023-24

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Income Tax is a direct tax that is levied on any individual’s or entity’s income during a financial year. It is directly paid to the government, like all the other direct taxes. The Income Tax Slab for FY 2023-24 is announced by Finance Minister Nirmala Sitharaman on 1st February 2023 in the Union Budget 2023-24 presented by her. The major highlight of the Budget related to taxpayers was the Rebate under Section 87A being increased to ₹7 Lakh, earlier which was ₹5 Lakh, i.e., Income up to ₹7 Lakh p.a. will be exempted from paying any Income Tax.

How to Calculate Income Tax?

The net taxable income is considered to calculate the tax liability of the individual or entity based on the income slabs provided by the Income-tax Department for the current financial year. The amount of tax paid depends on the money earned by the individual in that particular financial year. Income Tax for the financial year 2023-24 applies to all residents residing in the country whose annual income exceeds  ₹3 Lakh p.a. Income Tax payment, TDS/TCS payment, and Non-TDS/TCS payments can be done to file income tax online.

Income Tax Slab for FY 2023-24

 

Income Tax Slab Rates

The amount of tax one needs to pay depends upon the income tax bracket the person is falling into. 

In the Union Budget 2023, a new income tax slab has been announced by the Finance Minister of India. Currently, one can choose between the new tax regime and the old tax regime to file for Income Tax according to their convenience.

1. Income Tax slab rates for FY 2023-24 applicable for all Individuals and Hindu Undivided Family (HUFs) [New Tax Regime]:

Income Tax Slab for FY 2023-24

 

Major points in the New Income Tax Regime for FY 2023-24:

  1. The basic exemption limit is increased to ₹3 Lakh earlier, which was ₹2.5 Lakh.
  2. Rebate under Section 87A is increased to ₹7 Lakh earlier, which was ₹5 Lakh, i.e., Income up to ₹7 Lakh will be exempted from paying any Income Tax.
  3. A Standard Deduction of ₹50,000 is introduced for salaried and individual taxpayers under the New Income Tax Regime earlier, which was only applicable to Old Income Tax Regime.
  4. A deduction from the family pension up to ₹15,000 is introduced for individual taxpayers under the New Income Tax Regime earlier, which was only applicable to Old Income Tax Regime.
  5. The Highest Surcharge Rate levied on individuals having income above ₹2 Crore, but below ₹5 Crore is reduced to 25% earlier, which was 37%.
  6. The New Income Tax Regime will be the default regime from now on. Taxpayers will still have the option to choose the old tax regime.

As compared to the old tax regime, the new tax regime has a lower tax slab rate, but it eradicates most of the deductions available in the old tax regime.

2. Income Tax slab rates for FY 2023-24 [Old Regime]:

In the old regime of filing Income Tax, individual taxpayers are divided into three categories:

  • Individuals below 60 years of age.
  • Senior citizens above 60 years but below 80 years of age.
  • Super seniors above 80 years of age.

 

*NRIs: Non-resident Indians
*HUFs: Hindu Undivided Families

Taxability of Various Salary Components:

The compensation received against services provided in connection with employment by an employee from a current or former employer is termed as Salary. Section 15 of the Income Tax Act provides for the tax levied on salary. According to Income Tax Act, the term Salary includes Wages, Annuity or Pension, Gratuity, Fees, Commissions, Perquisites or Profits (In addition to salary/wages), Advance of Salary, Encashed Earned Leaves, Contribution in Provident Fund (up to the extent it is taxable), Contribution in Pension Scheme (refer to section 80CCD, i.e., NPS), etc. 

 


Last Updated : 10 May, 2023
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