Taxation
Income Tax Slabs
The Finance Act 2023 has amended the provisions of Section 115BAC w.e.f AY 2024-25 to make new tax regime the default tax regime for the assessee being an Individual, HUF, AOP (not being co-operative societies), BOI or Artificial Juridical Person. However, the eligible taxpayers have the option to opt out of new tax regime and choose to be taxed under old tax regime. The old tax regime refers to the system of income tax calculation and slabs that existed before the introduction of the new tax regime. In the old tax regime, you taxpayers have the option to claim various tax deductions and exemptions.
In case of “non-business cases”, option to choose the regime can be exercised every year directly in the ITR to be filed on or before the due date specified under section 139(1).
In case of eligible taxpayers having income from business and profession and wants to opt out of new tax regime, the assessee would be required to furnish Form-10-IEA on or before the due date u/s 139(1) for furnishing the return of income. Also, for the purpose of withdrawal of such option i.e. opting out of old tax regime shall also be done by way of furnishing Form No.10-IEA.
However, in case of eligible taxpayers having income from business and profession option to switch to old tax regime and withdraw the option in any subsequent AY is available only once in lifetime.
Tax rates for Individual (resident or non-resident) less than 60 years of age anytime during the previous year are as under:
| Old Tax Regime | New Tax Regime u/s 115BAC | ||
| Income Tax Slab | Income Tax Rate | Income Tax Slab | Income Tax Rate |
| Up to ₹ 2,50,000 | Nil | Up to ₹ 3,00,000 | Nil |
| ₹ 2,50,001 – ₹ 5,00,000 | 5% above ₹ 2,50,000 | ₹ 3,00,001 – ₹ 6,00,000 | 5% above ₹ 3,00,000 |
| ₹ 5,00,001 – ₹ 10,00,000 | ₹ 12,500 + 20% above ₹ 5,00,000 | ₹ 6,00,001 – ₹ 9,00,000 | ₹ 15,000 + 10% above ₹ 6,00,000 |
| Above ₹ 10,00,000 | ₹ 1,12,500 + 30% above ₹ 10,00,000 | ₹ 9,00,001 – ₹ 12,00,000 | ₹ 45,000 + 15% above ₹ 9,00,000 |
| ₹ 12,00,001 – ₹ 15,00,000 | ₹ 90,000 + 20% above ₹ 12,00,000 | ||
| Above ₹ 15,00,000 | ₹ 1,50,000 + 30% above ₹ 15,00,000 | ||
Tax rates for Individual (resident or non-resident), 60 years or more but less than 80 years of age anytime during the previous year are as under:
| Old Tax Regime | New Tax Regime u/s 115BAC | ||
| Income Tax Slab | Income Tax Rate | Income Tax Slab | Income Tax Rate |
|
Up to ₹ 3,00,000
|
Nil
|
Up to ₹ |
Nil
|
| 300,000 | |||
|
₹ 3,00,001 – ₹ 5,00,000
|
5% above ₹ 3,00,000
|
₹ 3,00,001 – ₹ |
5% above ₹ 3,00,000
|
| 600,000 | |||
|
₹ 5,00,001 – ₹ 10,00,000
|
₹ 10,000 + 20% above ₹ 5,00,000
|
₹ 6,00,001 – ₹ | ₹ 15,000 + 10% above ₹ |
| 900,000 | 600,000 | ||
|
Above ₹ 10,00,000
|
₹ 1,10,000 + 30% above ₹ 10,00,000
|
₹ 9,00,001 – ₹ | ₹ 45,000 + 15% above ₹ |
| 1,200,000 | 900,000 | ||
| ₹ 12,00,001 – ₹ | ₹ 90,000 + 20% above ₹ | ||
| 1,500,000 | 1,200,000 | ||
|
Above ₹ 15,00,000
|
₹ 1,50,000 + 30% above ₹ | ||
| 1,500,000 | |||
Tax rates for Individual (resident or non-resident) 80 years of age or more anytime during the previous year are as under:
| Old Tax Regime | New Tax Regime u/s 115BAC | ||
| Income Tax Slab | Income Tax Rate | Income Tax Slab | Income Tax Rate |
| Up to ₹ 5,00,000 | Nil | Up to ₹ 3,00,000 | Nil |
|
₹ 5,00,001 – ₹ 10,00,000
|
20% above ₹ 5,00,000
|
₹ 3,00,001 – ₹ |
5% above ₹ 3,00,000
|
| 600,000 | |||
|
Above ₹ 10,00,000
|
₹ 1,00,000 + 30% above ₹ 10,00,000
|
₹ 6,00,001 – ₹ | ₹ 15,000 + 10% above ₹ |
| 9,00,000₹ | 600,000 | ||
| ₹ 9,00,001 – ₹ | ₹ 45,000 + 15% above ₹ | ||
| 1,200,000 | 900,000 | ||
| ₹ 12,00,001 – ₹ | ₹ 90,000 + 20% above ₹ | ||
| 1,500,000 | 1,200,000 | ||
|
Above ₹ 15,00,000
|
₹ 1,50,000 + 30% above ₹ | ||
| 1,500,000 | |||
| 1. The rates of Surcharge under the tax regimes are as under: | ||||||||
|
Total Income
|
Old Tax Regime | New Tax Regime | ||||||
| Rate of Surcharge Applicable | ||||||||
| Up to Rs. 50 Lakh | Nil | Nil | ||||||
| Above Rs. 50 Lakh and up to Rs. 1 Crore | 10% | 10% | ||||||
| Above Rs. 1 Crore and up to Rs. 2 Crore | 15% | 15% | ||||||
| Above Rs. 2 Crore and up to Rs. 5 Crore | 25% | 25% | ||||||
| Above Rs. 5 Crore | 37% | 25% | ||||||
Note: The maximum rate of surcharge on income by way of dividend or income under the provisions of Sections 111A, 112A and 115AD is restricted to 15%
In case of an association of persons consisting of only companies as its members, the rate of surcharge on the amount of Income-tax shall be maximum 15% (applicable w.e.f AY 2023-24).
Surcharge, Marginal Relief and Health and Education cess
What is Surcharge?
Surcharge is an additional charge levied for persons earning Income above the specified limits, it is charged on the amount of income tax calculated as per applicable rates. For rates of surcharge, refer table above.
What is Marginal Relief?
Marginal relief is a relief from surcharge, provided in cases where the surcharge payable exceeds the additional income that makes the person liable for surcharge. The amount payable as surcharge shall not exceed the amount of income earned exceeding ₹ 50 lakh, 1 crore, 2 crore or 5 crore respectively as under:
| Net Income Range |
Marginal Relief
|
|||||||
| Exceeds (Rs.) | Does not exceed (Rs.) | |||||||
| 50 Lakh | 1 Crore | Amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs | ||||||
| 1 Crore | 2 Crore | Amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore | ||||||
| 2 Crore | 5 Crore | Amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore | ||||||
| 5 Crore | – | Amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore. | ||||||
What is Health and Education cess?
Health and Education cess @ 4% shall also be paid on the amount of income tax plus surcharge (if any)
Disclaimer: The content on this page is only to give an overview and general guidance and is not exhaustive. For complete details and guidelines, please refer Income Tax Act, Rules and Notifications
Source: Income Tax Department, Government of India