Income Tax Slabs and Rates

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Zainab Hawa

Budget 2021
Income Tax
Income Tax Filing
Last updated on May 8th, 2023

The Finance Minister presents the Union Budget every year on 1st February. Accordingly, the new income tax slabs/rates become applicable for the succeeding financial year.

Let us understand the income tax slabs under old tax regime and new tax regime for FY 2023-24 i.e., AY 2024-25:

Income Tax Slabs under Old Tax Regime

For Individuals/HUFs below the age of 60 years

Income Tax SlabIncome Tax Rate
Up to INR 2,50,000NIL
INR 2,50,001 to INR 5,00,0005% above INR 2,50,000
INR 5,00,001 to INR 10,00,000INR 12,500 + 20% above INR 5,00,000
Above INR 10,00,000INR 1,12,500 + 30% above INR 10,00,000

For Senior Citizens (Individuals/HUFs between the age of 60 years-80 years)

Income Tax SlabIncome Tax Rate
Up to INR 3,00,000NIL
INR 3,00,001 to INR 5,00,0005% above INR 3,00,000
INR 5,00,001 to INR 10,00,000INR 10,000 + 20% above INR 5,00,000
Above INR 10,00,000INR 1,10,000 + 30% above INR 10,00,000

For Super Senior Citizens (Individuals/HUFs above the age of 80 years)

Income Tax SlabIncome Tax Rate
Up to INR 5,00,000NIL
INR 5,00,001 to INR 10,00,00020% above INR 5,00,000
Above INR 10,00,000INR 1,00,000 + 30% above INR 10,00,000
The tax rebate u/s 87A is available to resident individuals whose total income is upto INR 5 lakhs. The maximum amount of rebate available is INR 12,500 or the amount of tax payable, whichever is lower.
Tip
The tax rebate u/s 87A is available to resident individuals whose total income is upto INR 5 lakhs. The maximum amount of rebate available is INR 12,500 or the amount of tax payable, whichever is lower.

Cess: An additional 4% Health and Educational Cess will be applicable to the tax amount calculated.
Surcharge: It depends upon your income range and is taxed on the income tax. Rates of surcharge for individuals/HUFs opting for old tax regime rates are as below:

Income RangeINR 50 lakhs to INR 1 Cr.INR 1 Cr. to INR 2 Cr.INR 2 Cr. to INR 5 Cr.Above INR 5 Cr.
Surcharge Rate10%15%25%37%

Income Tax Slabs for Individuals/HUFs under New Tax Regime

Income Tax SlabIncome Tax Rate
Up to INR 3,00,000NIL
INR 3,00,001 to INR 6,00,0005% above INR 3,00,000 
INR 6,00,001 to INR 9,00,000INR 15,000 + 10% above INR 6,00,000
INR 9,00,001 to INR 12,00,000INR 45,000 + 15% above INR 9,00,000
INR 12,00,001 to INR 15,00,000INR 90,000 + 20% above INR 12,00,000
Above INR 15,00,000INR 1,50,000 + 30% above INR 15,00,000
The tax rebate u/s 87A is available to resident individuals whose total income is upto INR 7 lakh. The maximum amount of rebate available is INR 25000 or the amount of tax payable, whichever is lower.
Tip
The tax rebate u/s 87A is available to resident individuals whose total income is upto INR 7 lakh. The maximum amount of rebate available is INR 25000 or the amount of tax payable, whichever is lower.

Cess: An additional 4% Health and Educational Cess will be applicable to the tax amount calculated.

Surcharge: Rates of surcharge for individuals/HUFs opting for new tax regime rates are as below:

Income RangeINR 50 lakhs to INR 1 Cr.INR 1 Cr. to INR 2 Cr.Above INR 2 Cr
Surcharge Rate10%15%25%

Income Tax Slabs for Other than Individuals/HUFs

Rate for AOP/BOI/Any other artificial juridical person

Net Income RangeIncome Tax Rates
Up to INR 2,50,000NIL 
INR 2,50,000 to INR 5,00,000 5%
INR 5,00,000 to INR 10,00,00020%
Above INR 10,00,00030%

Cess and Surcharge are the same as the rate applicable to Individuals and HUFs.

Only Individuals and HUFs can pay tax under new tax regime slab rates.
Tip
Only Individuals and HUFs can pay tax under new tax regime slab rates.

Rates for Partnership Firms

Tax rate30%
Cess4%
Surcharge (applicable only if total income exceeds INR 1 Cr.)12%

Rates for Domestic Companies

Domestic CompanyTax Rates
if opted for Section 115BA25%
if opted for Section 115BAA22%
if opted for Section 115BAB (Manufacturing)15%
Any other Domestic Company30%

Cess: An additional 4% Health and Educational Cess will be applicable to the tax amount and surcharge.

Surcharge applicable to companies:

The tax rate for foreign companies is 40%.
Tip
The tax rate for foreign companies is 40%.

Rates for co-operative society

Net Income RangeIncome Tax Rates
Up to INR 10,00010%
INR 10,000 to INR 20,00020%
Above INR 20,00030%

Cess: An additional 4% Health and Educational Cess will be applicable to the tax amount calculated above.
Surcharge W.e.f AY 2023-24,

Rates for local authority

The local authority is taxable at 30%. 
Cess: An additional 4% Health and Educational Cess will be applicable to the tax amount calculated above.
Surcharge: 12% of Income Tax when total income exceeds INR 1 Cr.

What is Surcharge on Income Tax?

A surcharge is an additional charge on Income Tax. It was introduced with the principle that the rich should contribute more by way of tax, as compared to the poor. A Surcharge is calculated on total income tax and not on total income.

Surcharge Rates

The below table shows the surcharge on income tax applicable to any individual, HUF, AOP, BOI, or any artificial judicial person.

Nature of IncomeMore than 50L and up to 1 Cr.More than 1 Cr. and up to  2 Cr. More than 2 Cr. and up to 5 Cr.More than 5 Cr.
STCG chargeable to tax u/s 111A10%15%15%15%
LTCG chargeable to tax u/s 112A10%15%15%15%
Any Other Income10%15%25%37% (25% in case of new tax regime u/s 115BAC)
Finance Minister proposed to reduce the tax surcharge rate from 37% to 25% (under new tax regime) on income above INR 5 Cr.
Tip
Finance Minister proposed to reduce the tax surcharge rate from 37% to 25% (under new tax regime) on income above INR 5 Cr.

FAQs

What is Surcharge on income tax?

Surcharge is an additional tax levied on taxpayers who have a higher income. It is calculated as a percentage of the total tax payable and the rate of the surcharge depends upon the income slab that the taxpayer falls under.

How to calculate rebate u/s 87A?

1. Calculate your Gross Total Income (GTI)
2. Reduce the deductions under sections 80C to 80U
3. Calculate your Tax Payable as per Income Tax slabs
4. Deduct the amount of rebate allowed

What is basic exemption limit?

The basic exemption limit depends upon the age and income of the taxpayer.
Basic exemption limit under old tax regime:
For individuals below the age of 60 years: INR 2.5lakh,
For senior citizens between the age of 60 years and 80 years: INR 3 lakh,
For super senior citizens above the age of 80 years: INR 5 lakh.
In case of new tax regime, the basic exemption limit is INR 3 lakh.

Can a HUF or NRI claim a rebate u/s 87A?

No. Only resident individuals can claim the benefit of rebate u/s 87A.

Got Questions? Ask Away!

  1. If I want to opt for the New regime but had told my employer that I am choosing the existing one, can I select new tax regime while filing ITR??

  2. Hey @riya_gupta

    An individual having salaried income and no business income has the option to choose between the old and new tax regimes every year i.e. he/she can switch regimes from year to year.

    However, individuals having business income are not eligible to choose between the new and old tax regime every year. Once they have opted for the new tax regime, they only have a one-time option of switching back to the old tax regime in their lifetime.

    Once they switch back, they will not be allowed to opt for new tax regime again.

  3. Hey @TanyaChopra

    If you have opted for old tax regime with your employer for TDS on salary, and plan to opt the new tax regime at the time of filing ITR, then you can do that by filling the new form i.e. 10-IE.

  4. Can full-time traders claim expenses like Broker charges STT, GST + other expenses like computer buy for trading, internet connection bill etc under new tax slabs?

  5. Apart from the tax-saving criteria, which tax slab is better for a first-time taxpayer?

  6. Hey @HarishMehta

    If you forget to fill the new form i.e. Form 10-IE, at the time of filing ITR, then you may be disallowed the tax rates available under the new tax regime. The tax department will calculate your income tax liability based on the existing/old tax regime.

  7. Hey @SonalYadav

    These budget changes will be applicable from FY 2020-21. From FY 2020-21 it will be up to the taxpayer to select the tax regime based on their Income and Investments situation.

    Following are the pros of following a new tax regime:

    1. The Income Tax Slab Rates are lower,
    2. A simplified Tax Structure i.e, Ease in filing ITR.
    3. Individuals can invest freely according to their financial goals without any compulsion to make an investment to avail deduction.

    Following are the cons of following a new tax regime:

    1. Discourages New Home buyers since no benefit will be available on Interest paid on Home Loans.
    2. Salaried individuals who live in rented properties will not be able to claim Exemption on HRA which will increase their tax burden.
    3. No tax benefit under section 80C or 80CCD(1B) upon investment in different tax savings schemes.

    Hope this helps! :slight_smile:

  8. Hey @HarshitShah

    Yes, any individual taxpayer can opt for new tax slabs, there are no restrictions based on type of income earned by a taxpayer.

    Under new tax slabs, you will be able to claim all the direct expenses related to your business activity while calculating your taxable income.

    Hope this helps!

  9. I have carry forward losses in the previous financial years, is it allowed to claim losses under the new tax regime?

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