Updated : December 29, 2023Income tax rates for individuals in india - FY 2023-24
Overview : Remember feeling lost in the tax code jungle the last time you filed? You're not alone. Unravelling the mysteries of income tax rates can be daunting. But worry no more! This article is your friendly tax Sherpa, leading you step-by-step through the FY 2023-24 tax rates for Individual or HUF Income Tax Assessee, answering all your burning questions and helping you confidently navigate the tax terrain.
The Income Tax Slabs in India are announced by the Finance Minister every year. For the financial year 2023-24, Finance Minister Nirmala Sitharaman announced the Union Budget 2023 on 1 February 2023. The Indian Income Tax Rate is based on the slab, meaning that those with low income pay the lowest percentage, 10%, as income tax. On the other hand, the highest tax rate is 30%. In addition to the Income tax, the assessee must also pay education cess and surcharge. The surcharge applies only to high-income-earning taxpayers with taxable income over Rs. 50 Lakhs. Learn more about Income Tax Return Filing
Old vs New Income Tax Regime
Currently, there are two different Income Tax regimes. Under both the new regime and the old regime, taxpayers can avail of tax benefits. The old regime is familiar and complex, offering a more comprehensive range of deductions and exemptions, while the new regime is more straightforward, with fewer deductions and lower tax rates. The regime choice depends on individual circumstances, income level, and investment habits. Both regimes offer tax rebates and surcharges, with slight variations. The article suggests consulting a financial advisor or team setindiabiz to determine the most beneficial regime and stay updated on future changes.
Individual Income Tax Rates FY 2023-24 : Old vs. New Regime Comparison
It’s essential to choose a suitable tax regime as it can have a significant impact on your final tax liability. Therefore, it’s crucial to understand the key differences between the old and new systems. Let’s take a closer look at their tax slabs and rates, presented in a clear and concise tabular format :
Income Tax Rates for Individuals/HUF (FY 2023-24)
| Annual Taxable Income | New Tax Regime | Old Tax Regime | ||
|---|---|---|---|---|
| During FY 2023-24 | Normal Rate | Normal Rate | Sr. Citizen | Super Sr Citizen |
| Up to Rs.2.5 lakh | Nil | Nil | Nil | Nil |
| Rs.2.5 lakh to Rs.3 lakh | Nil | 5% | Nil | Nil |
| Rs.3 lakh to Rs. 5 lakh | 5% | 5% | 5% | Nil |
| Rs.5 lakh to Rs.6 lakh | 5% | 20% | 20% | 20% |
| Rs.6 lakh to Rs. 9 lakh | 10% | 20% | 20% | 20% |
| Rs.9 lakh to Rs.10 lakh | 12% | 20% | 20% | 20% |
| Rs.10 lakh to Rs.12 lakh | 15% | 15% | 30% | 30% |
| Rs.12 lakh to Rs.15 lakh | 20% | 30% | 30% | 30% |
| Above Rs.15 lakh | 30% | 30% | 30% | 30% |
Note :
- Senior Citizen : 60 years or older but less than 80 at any time during the previous year.
- Resident Super Senior Citizen is an individual who is 80 years or older at any time during the previous year.
Marginal Relief : Section 87A of the Income Tax Act provides a tax rebate to individual taxpayers and HUFs. The latest budget has made some exciting revisions. Under the old regime, if your net taxable income is less than Rs. 5 lakh, you can claim up to Rs. 12,500. Under the new regime, if your net taxable income is up to Rs. 7 lakh, you can claim a rebate of 100% of your income tax or a maximum of Rs. 25,000. Learn More
Education Cess : The Indian government imposes a levy called the education cess, an additional tax collected on top of the income tax. The purpose of this levy is to fund education initiatives and development programs. In the assessment year 2024-25, which is FY 2023-24, the education cess will remain unchanged at 4%. This means that it will apply to both old and new tax regimes. Learn More
Surcharge : A surcharge on income tax is an additional tax imposed by the government on high-income taxpayers to fund specific programs or address budgetary shortfalls. It ensures that higher-earning taxpayers contribute proportionally more to public revenue and serves as a tool for fiscal policy. The table below shows the surcharge rate for the old as well as new tax regimes. Learn More
Surcharge under New Tax Regime
| Income Range (Rs.) | Tax Rate (%) | Surcharge Rate | Health & Edu Cess | Effective Tax Rate |
|---|---|---|---|---|
| Up to 50 Lakhs | Slab based | Nil | 4% | Slab Based |
| 50 Lakhs - 1 Crore | 30% | 10% | 4% | 34.20% |
| 1 Crore - 2 Crore | 30% | 15% | 4% | 35.70% |
| Above 5 Crore | 30% | 25% | 4% | 38.70% |
Surcharge on Income of Individuals under the Old Regime
| Income Range (Rs.) | Tax Rate (%) | Surcharge Rate | Health & Edu Cess | Effective Tax Rate |
|---|---|---|---|---|
| Up to 50 Lakhs | Slab based | Nil | 4% | Slab Based |
| 50 Lakhs - 1 Crore | 30% | 10% | 4% | 34.20% |
| 1 Crore - 2 Crore | 30% | 15% | 4% | 35.70% |
| 2 Crore - 5 Crore | 30% | 25% | 4% | 38.70% |
| Above 5 Crore | 30% | 37% | 4% | 42.30% |
Conclusion
The article provides a comprehensive guide to the Income Tax Rates for individuals or HUF Taxpayers for FY 2023-24, including a discussion on the old and new tax regimes, deductions, and capital gain tax rates. It goes through the different tax slabs and rates for both regimes and highlights the importance of choosing a suitable tax regime that can significantly impact one's final tax liability. The article also covers education cess and surcharge and provides a clear tabular comparison of the two regimes' tax slabs and rates.
