Income tax slab & rates FY 2023-24 (A.Y. 2024-25)

On 1st, February 2023 finance minister Mrs. Nirmala Sitharaman has announced new tax regime for FY 2023-24 and 2022-23. In which she has made changes in tax rates applicable to individuals for computing tax. Here we’ll explain the income tax slab rates fy 2023-24 under new tax regime.

What is tax slab rate??

Income tax slab means different tax rates have been prescribed for different ranges of income. It means tax rates increases with increase in income of tax payer.

Income tax slab under new tax regime for FY 2023-24 (A.Y. 2024-25)

The new tax slab will be in force from 1st April 2023 and these rates and changes in it will applicable to income earned in financial year 2023-24. Tax rates in new tax regime is same for all the categories of individuals (Whereas in old tax regime there is different slab rate for different age group i.e. there was three categories 1. For age below 60 years 2. Above 60 years but below 80 years ( Senior citizens) 3. Above 80 Years (Super Senior Citizens).

Under new tax regime Rebate u/s 87A-https://taxandfinanceguide.com/?p=183&preview=true has been increases from 5,00,000 (tax rebate 12,500) to 7,00,000(tax rebate 25,000). This means any individual opting new tax regime with taxable income upto 7,00,000 will not pay any tax. Earlier above rebate was upto 5,00,000.

The new tax regime for Individual and HUF to be the default regime. And This regime would also become the default regime for AOP (other than co-operative), BOI and AJP.
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Here , the new income tax slabs for FY 2023-24 (AY 2024-25)

Income Slab
From 0 to 3,00,000	Nil
3,00,001 to 6,00,000	5%
6,00,001 to 9,00,000	10%
9,00,001 to 12,00,000	15%
12,00,001 to 15,00,000	20%
Above 15,00,000	30%

Further , new tax regime offers lower income tax rates , below mentioned conditions to be satisficed for payment of income tax under new regime:

• Total income should be calculated without claiming deductions and exemption specified in different provisions of income tax. After announcement of union budget 2023 , many of the deductions are not allowed in new taxation regime for example chapter VIA deductions.
• Total income should be calculated without claiming deductions and exemptions for allowance or perquisites for under any other law in force at times.

Let us explain the new slab with an Example:

Lets say Mr. X having salary income of Rs. 18,00,000 p.a., he has paid Mediclaim and Lic premium of Rs. 25,000 and 30,000 respectively . Saving bank interest is Rs. 35,000 and other interest income is Rs. 10,000. Also gave donation of Rs. 45,000 .

Computation of taxable income and tax liability under new regime for FY 2023-34 (A.Y. 2024-25)

Particulars	Amount(Rs.)	Amount(Rs.)
Income from salary		17,00,000
Other Income
*Saving bank interest	35,000
*Other interest income	10,000	45,000
Gross total income		17,45,000
Less: Exemption & Deductions
Standard deductions		50,000
Taxable income		16,95,000

computation of tax

Income	Tax rates	Tax liability
From 0 to 3,00,000	Nil	Nil
3,00,001 to 6,00,000	5% of 3,00,000	15,000
6,00,001 to 9,00,000	10% of 3,00,000	30,000 i.e. 15,000+30,000= 45,000
9,00,001 to 12,00,000	15% of 3,00,000	45,000 i.e. 45,000+45000= 90,000
12,00,001 to 15,00,000	20% of 3,00,000	60,000 i.e. 90,000+60,000= 1,50,000
Above 15,00,000 (16,95,000-15,00,000)	30% of 1,95,000	58500 i.e. 1,50,000+58,500= 2,08,500
Add: Education cess & Secondary and higher education cess	4% of 208500	8340
Final Tax Liability		2,16,840