New Income Tax Slab Rates for Fy 2023-24 (Ay 2024-25) In India – Budget 2023

The fiscal landscape in India has been reshaped with the unveiling of the Budget 2023, ushering in a new era of income tax slab rates for the financial year 2023-24 (assessment year 2024-25). This pivotal announcement has brought about changes that impact taxpayers across the country, warranting a comprehensive understanding of the revised income tax structure. From alterations in exemption limits to modifications in tax rates, these adjustments set the stage for a fresh approach to taxation in India. Let’s delve into the intricacies of these newly introduced income tax slab rates and their implications for individuals and entities.

The basic exemption limit has been hiked to ₹3 lakh from ₹2.5 earlier under the new income tax regime. The amount of rebate under Section 87A has been enhanced under the new tax regime to taxable income of ₹7 lakh. The tax rebate was available for taxable income up to ₹5 in the new tax regime till FY 2022-23. Thus, individuals opting for the new income tax regime in FY 2023-24 and having an income up to ₹7 lakh will not pay any taxes. Standard deduction benefit has been introduced in a new tax regime for salaried and pensioners. (including family pensioners)

Income Tax Slabs in FY 2023-24 (AY 2023-24) for HUF and Individuals

As per the Budget 2023 announcement, new income tax slab rates FY 23-2024 for every individual is as below:

Income Tax Slab for Super Senior Citizens in AY 2024-25 (FY 2023-24)

As per the Income Tax Act, 1961, taxpayers above 80 years of age are considered as super senior citizens and they get a higher exemption limit of ₹5 lakh under the old tax regime. This benefit is however not applicable to super senior citizens opting for the new tax regime slabs in FY 2023-24. Super senior citizens will be required to pay taxes as per the income tax slab FY 2023-24 & AY 2024-25 under the old tax regime and new tax regime as mentioned below:

Income Tax Slabs & Rates for Senior Citizens in AY 2024-25 (FY 2023-24)

Individuals who fall within the age bracket of 60 to below 80 years and contribute taxes are classified as Senior Citizens according to the Income Tax Act of 1961. They are entitled to a more generous exemption limit under the previous tax structure compared to taxpayers under 60 years of age. Unfortunately, this advantage is no longer applicable in the new tax structure for the assessment year 2024-25. Let’s juxtapose the income tax thresholds and rates for senior citizens under the traditional and new tax structures for the financial year 2023-24.

As evident, following the revision in the new tax structure outlined in the 2023 Budget, senior citizen taxpayers now have a basic exemption threshold of ₹3 lakh under both tax regimes. Nevertheless, senior citizens who choose the new tax regime brackets for the financial year 2023-24 can take advantage of reduced income tax slab rates for the year.  

Income Tax Slab for AOP, BOI & AJP in AY 2024-25

Taxpayers other than Individuals and HUF like Association of Persons (AOP), Body of Individuals (BOI) and Artificial Judicial Person (AJP) currently do not qualify for the new tax regime. As, a result, the income tax slabs and rates for these taxpayers in AY 2024-25 are the same as the old tax regime slabs for AY 2023-24 as shown below:

Surcharge on Income Tax for FY 23-24

The Budget declaration of 2023 also encompassed a reduction solely within the new tax structure, pertaining to the surcharge on income tax, which plummeted from 37% in the assessment year 2023-24 to 25% in the assessment year 2024-25. Surcharge is imposed on the income tax sum when the taxpayer’s overall income surpasses a designated yearly income threshold. Below is a clear depiction of the surcharge percentages applicable to the traditional tax regime versus the new tax regime for the fiscal year 2023-24:

Note: 25% and 37% surcharge on income tax is not levied from taxable income under Section 111A, 112A and 115AD of the Income Tax Act, 1961. In such cases, the surcharge on income tax is 15%. However, there is marginal relief available in certain cases on surcharge of income tax. You can always use an online income tax calculator from Vakilsearch for detailed calculation. 

Upon seeking advice from our tax experts, it is confirmed that you currently have the flexibility to opt for either the revised new tax regime or the previous tax regime for the assessment year 2024-25, according to your preference. It’s worth noting that the income tax slabs and rates remain consistent for all taxpayers under the new tax regime. Differing from the old tax structure, the new regime applies uniform tax rates for HUFs, individuals below 60 years of age, senior citizens (aged 60 to 80 years), and super senior citizens (aged above 80 years).

Furthermore, it’s important to be aware that the health and education cess on income tax for the fiscal year 2023-24 remains unchanged, maintaining a rate of 4%, similar to the previous fiscal year. If you have any further queries or require detailed guidance tailored to your specific situation, our experts are readily available to provide assistance.

• Author
• Recent Posts

Team Vakilsearch

Chief Content Editor (National Law School of India University) at Zolvit.com

Pravien is the Chief Editor at News.Vakilsearch.com, one of India's leading legal news platforms. He graduated with honors from the National Law School of India University, Bengaluru, which ranks among India's top legal institutions.

With over a decade of experience in the legal journalism field, Rajeev has a knack for simplifying complex legal matters for the common reader. His dedication to unbiased reporting and commitment to factual accuracy has established him as a respected figure in the Indian legal community. When he's not dissecting the latest court rulings, Pravien enjoys mentoring young journalists.

Latest posts by Team Vakilsearch (see all)

• India’s Economic Pulse Beats Strong as LLP Registrations Soar 54% - January 5, 2024
• Company Faces ₹5 Lakh Penalty for Breaching Registered Office Compliance: Ministry of Corporate Affairs Takes Action - December 13, 2023
• AI’s Growing Role in Uncovering GST Evasions Raises Concerns Among Businesses - December 13, 2023