Income Tax Slab Rates for F.Y. 2023-24/A.Y. 2024-25! Explained

Every individual, HUF, partnership firm, LLP and corporate is liable to pay Income Tax under the Income Tax Act of India. For individuals, the income tax is not levied on flat rates but on slab rates. The slab system has different limits for different amounts of taxes that will be levied. The Income tax will be levied and will have to be paid once an individual files an ITR. If it is found that the individual has an income that is more than the specified taxable income, then the individual will have to pay the applied taxes.

Under the old and new tax regimes, the income tax slabs are different. Also, the income tax slab rates for people who opt for the old tax regime are classified into three categories:

• Individuals(Those residents whose age is more than 60 years and all the non-residents need to be covered in the group disregarding their ages)
• Senior Citizens that are residents(60 to 80)
• Super Senior Citizen Residents(aged more than 80 years)

Introduction to Income Tax Slabs

In India, the income tax is applied to people on the basis of a slab system. In this system, different income ranges have different tax rates. This means that in case the income of an individual increases, then the tax rates applied to the income will also increase. This kind of taxation system avails a fair and progressive taxation system in India. These slabs under the income tax slabs system are revised on a periodic basis during each budget. The tax slabs are different for different groups of taxpayers. Let us go through all the tax slabs and their rates which are applicable in the Financial Year 2023-24(Assessment Year 2024-25) and Financial year 2022-23(Assessment Year 2023-24).

Slab Rates of Income Tax for Financial Year 2022-23 (Assessment Year 2023-24)

a. New Tax Regime:

Under this new regime, the taxpayer can choose between the following options:

• To pay income tax that has lower rates according to the New Tax Regime subject to one condition that they give up some permissible deductions and exemptions that are allowed under the Income Tax.
• Continue to pay the applicable taxes under the old tax rates. The taxpayer can easily enjoy exemptions and rebates by following the old tax regime but will have to pay tax at higher rates.

Slab Rates for Income Tax:

b.Old Tax Regime:

Old Tax regime having the following tax slabs for individuals below the age of 60 years and HUF:

 The exemption limit for income tax is Rs. 2.50 Lakhs for HUF and individuals below the age of 60 years and NRIs. Also, cess and surcharges will be applied as mentioned above.

Comparing the old and new tax regime slab rates for FY 2022-23(AY 2023-24)

Revised Slab Rates for Income Tax Financial Year 2023-24(AY 2023-24)-For new Tax regime

Conditions to Opt the New Tax Regime

In case an individual wishes to opt for lower rates in the New Tax Regime, then he will have to give up on some deductions and exemptions which are available in the old tax regime. A total of 70 deductions and exemptions are prohibited under the new tax regime. Some of them are widely used and are listed below.

Deductions and exemptions prohibited under new tax regime:

• Leave travel allowance
• House rent allowance
• Conveyance allowance
• Daily expenses during employment
• Relocation allowance
• Helper allowance
• Children's education allowance
• Other special allowances under section 10(14)
• Standard dedication of salary
• Professional tax
• Interest on housing loan under section 24
• Deduction under chapter VI-A

Deductions allowed in the new tax regime:

• Providing transport allowance to specially abled people
• Conveyance allowance for expenses for travelling during work
• Investments to pension scheme under section 80CCD(2)
• Deduction for employing new employee under section 80JJAA
• Depreciation under section 32 of income tax act
• Travelling allowance for employment or transfers

Conclusion

Through this blog we came to know about the income tax slab rates for the financial year 2022-23(assessment year 2023-24) and for financial year 2023-24(assessment year 2024-25). We also came to know about the differences between the new and old tax regimes. One can choose to pay income taxes either at higher rates under the old tax regime or at  lower rates under the new tax regime.