Income Tax slab 2023-2024: New income tax regime has seen a major revamp in the income tax slab rates for 2023-24. The basic exemption limit under the new income tax regime has been hiked to Rs 3 lakh. The income tax rebate limit available for salaried and individual taxpayers under the new income tax regime has been hiked to Rs 7 lakh from the present Rs 5 lakh. See the table below to know the income tax slabs 2023 for the new income tax regime.
Income Tax Slabs 2023: These are the new income tax slabs under the new tax regime.
1. Up to Rs 3 lakh income there is 0% or NIL tax
2. From Rs 3 lakh to Rs 6 lakh the tax rate is 5%
3. From Rs 6 lakh to Rs 9 lakh the tax rate is 10%
4. From Rs 9 lakh to Rs 12 lakh the tax rate is 15%
5. From Rs 12 lakh to Rs 15 lakh the tax rate is 20%
6. Above Rs 15 lakh the tax rate is 30%
These were the income rates for 2022-23 under the new tax regime
1. Up to Rs 2.5 lakh income there is 0% or NIL tax
2. From Rs 2.5 lakh to Rs 5 lakh the tax rate is 5%
3. From Rs 5 lakh to Rs 7.5 lakh the tax rate is 10%
4. From Rs 7.5 lakh to Rs 10 lakh the tax rate is 15%
5. From Rs 10 lakh to Rs 12.5 lakh the tax rate is 20%
6. From 12.5 lakh to Rs 15 lakh the tax rate is 25%
7. Above Rs 15 lakh the tax rate is 30%
Income Tax Live: Highlights of major announcements
FM Nirmala Sitharaman has announced several new changes aimed at lowering the income tax burden and income tax outgo of the middle-class, salaried taxpayers, individual taxpayers and senior citizens. Below are the highlights of her major income tax announcements:
- New income tax regime will now be the default regime but taxpayers have an option to choose old regime
- Standard deduction of Rs 50,000 to salaried individual, and deduction from family pension up to Rs 15,000, is currently allowed only under the old regime. It is proposed to allow these two deductions under the new regime also.
- Rebate limit under the new tax regime to be increased from Rs 5 lakhs to Rs 7 lakhs. This means no income tax outgo for a taxpayer earning up to Rs 7 lakh under the new income tax regime.
- An individual with an income of 15 lakhs will only be required to pay 1.5 lakhs as tax
- 45% of filed returns processed within 24 hours, says FM
- Average Processing time of returns reduced from 93 days to 16 days, says FM
- Focus on technology based tax governance
- Presumptive taxation turnover limit increased to 75 lakh for professionals. Cash receipt no more than 5%
- Roll out a next Gen-IT return form
- A system of unified filing process to be set up to facilitate agencies to source the data from a common portal as per the choice of those filing returns
- Surcharge on income-tax under both old regime and new regime is 10 per cent if income is above Rs 50 lakh and up to Rs 1 crore, 15 per cent if income is above Rs 1 crore and up to Rs 2 crore, 25 per cent if income is above Rs 2 crore and up to Rs 5 crore, and 37 per cent if income is above Rs 5 crore. It is proposed that the for those individuals, HUF, AOP (other than co-operative), BOI and AJP under the new regime, surcharge would be same except that the surcharge rate of 37 per cent will not apply. Highest surcharge shall be 25 per cent for income above Rs 2 crore. This would reduce the maximum rate from about 42.7 per cent to about 39 per cent. No change in surcharge is proposed for those who opt to be under the old regime.
- Encashment of earned leave up to 10 months of average salary, at the time of retirement in case of an employee (other than an employee of the Central Government or State Government), is exempt under sub-clause (ii) of clause (10AA) of section 10 of the Income-tax Act (“the Act”) to the extent notified. The maximum amount which can be exempted is Rs 3 lakh at present. It is proposed to issue notification to extend this limit to Rs 25 lakh.
- TCS enhanced on foreign remittances – the rate has increased from 5 per cent to 20 per cent without the ceiling of 7 lakhs
- Sum received (except in case of death of the insured person) from an insurance policy (other than ULIP for which provision already exists as brought in the Finance Act 2021) where aggregate of premium payable for any of the years during the terms of the policy exceeds Rs 5 lakhs is now proposed to be subjected to taxed. This is proposed for policies issued on or after 1st April 2023.
- For the purpose of computing capital gains, it is now proposed that the cost of acquisition or the cost of improvement shall not include the amount of interest claimed under section 24 of the Act (under the head income from house property) or deduction under chapter VIA
- It is proposed to amend section 194B and section 194BB (income from lottery or crossword puzzle and horse racing respectively) of the Act to provide that the TDS should be deducted on the amount or “aggregate of the amount” (currently the section only states- amount) exceeding Rs. 10,000 in a financial year. Additionally, it is proposed to include “gambling or betting of any form or nature” within the scope and section 194BA is proposed to be introduced for online games.
- Currently, if the donee is a Non-resident and receives any sum of money exceeding Rs. 50,000 without consideration from a resident individual (except which is specifically excluded in the Act), the same is considered to be income deemed to accrue or arise in India (under section 9). As per the budget announced, an individual qualifying as Not ordinarily resident is also proposed to be included in the ambit.
- As per the proposed new section (50AA), the capital gains from the transfer/redemption/maturity of market linked debentures is proposed to be treated and taxed as short-term capital gains. Currently it is taxed as long-term capital gain at the rate of 10% without indexation.
- Time limit for completion of scrutiny assessment (for the Assessment year 2022-23 onwards) proposed to be extended to 12 months from the end of relevant AY as against the current limit of 9 months. This is also applicable in case of updated returns.
New Income Tax Regime: How much income tax will you save?
- If you have an income of up to Rs 7 lakh, in effect you will not have to pay any tax because the rebate limit has been hiked to Rs 7 lakh
- If you earn Rs 9 lakh, then your income tax savings will be Rs 15,600 with cess
- If you earn Rs 15 lakh, then your income tax savings will be Rs 39,000 with cess
New Income Tax Regime 2023 – 2024: List of deductions not available
- Leave travel allowance
- HRA
- Professional tax
- Interest in housing loan (self occupied)
- Chapter VI-A deductions (80C, 80D, 80E etc.) except u/s 80CCD(2) (i.e. contribution to NPS by employer)
According to the Budget, “Any individual, HUF, AOP (other than co-operative), BOI or AJP not willing to be taxed under this new regime can opt to be taxed under the old regime. For those person having income under the head “profit and gains of business or profession” and having opted for old regime can revoke that option only once and after that they will continue to be taxed under the new regime. For those not having income under the head “profit and gains of business or profession”, option for old regime may be exercised in each year.” Salaried taxpayers opting for the regular income tax regime will have to continue paying income tax as per the tax slabs mentioned below:
- Up to Rs 2,50,000 income – NIL tax rate
- Rs 2,50,001 – Rs 5,00,000 income – 5% tax rate
- Rs 5,00,001 – Rs 10,00,000 income – 20% tax rate
- Above Rs 10,00,000 income – 30% tax rate
Income Tax 2023: Frequently Asked Questions
- What are the new rules for ITR filing?
No new rules have been introduced for filing ITR. However, the new income tax regime will be the default income tax regime for taxpayers. Taxpayers will continue to have the option to opt for the old or regular income tax regime. - Which is better new or old tax regime?
New income tax regime versus old income tax regime – this answer depends on your income. In case you are earning up to Rs 15 lakh, then it makes sense to opt for the new income tax regime, given the tax savings under the new tax slabs. However, for higher incomes it may still make sense to opt for the old tax regime, given your savings and investment avenues. - Is bank interest taxable on new tax regime?
Yes, your interest from savings bank account is taxable under the new income tax regime since the Section 80TTA deduction is not available. - What is the minimum salary to file ITR?
Rs 2.5 lakh is the net taxable income at which you are mandatorily required to file your income tax return. - How much income is tax free?
Under the new income tax regime, salary income up to Rs 7 lakh will not be taxable. Under the old income tax regime, salary income up to Rs 5 lakh is not taxable. - What are the benefits of new tax regime?
The new income tax regime allows a salaried tax payer to avail lower income tax rates and hence benefit from a lower income tax outgo. For fiscal 2023-24 standard deduction has been included in the new income tax regime. However, common exemptions such as Section 80C, 80D, 80TTA, housing loan benefits are not available. - What is the income tax slab for 2022 to 2023?
Under the regular income tax regime
Up to Rs 2,50,000 income – NIL tax rate
Rs 2,50,001 – Rs 5,00,000 income – 5% tax rate
Rs 5,00,001 – Rs 10,00,000 income – 20% tax rate
Above Rs 10,00,000 income – 30% tax rate - Who is eligible for the new income tax regime?
Salaried income taxpayers and individual taxpayers can avail the new income tax regime which allows for lower income tax rates to be availed if the taxpayer is willing to let go of exemptions such as Section 80C, Section 80D, Section 80TTA, etc. - What tax year are we filing for in 2023?
In 2023, the income tax return will be filed for financial year 2022-23 and assessment year 2023-24. - What are the exemptions for new income tax?
Under the new income tax regime, the basic tax exemption limit has been hiked to Rs 3 lakh from the present Rs 2.5 lakh. Other than that the common exemptions such as Section 80C, Section 80D cannot be availed. - What are the new income tax slabs for 2023 to 2024 under new tax regime?
Up to Rs 3 lakh income there is 0% or NIL tax
From Rs 3 lakh to Rs 6 lakh the tax rate is 5%
From Rs 6 lakh to Rs 9 lakh the tax rate is 10%
From Rs 9 lakh to Rs 12 lakh the tax rate is 15%
From Rs 12 lakh to Rs 15 lakh the tax rate is 20%
Above Rs 15 lakh the tax rate is 30 Source TOI