The income tax slab for the Financial Year 2023-24 can help you understand how much tax you need to pay during the year. Having said that, just like every year, the income tax slab for Financial Year comprises different ranges of income with different rates. However, the government has introduced certain changes in Income Tax slabs for the Financial Year 2023-24.
In this blog, we will tell you about these changes as well as Income tax slabs for the FY 2023-24.
Income Tax Slab Changes
Through the Union Budget, 2023 many changes have been introduced in the income tax slab under the new tax regime for the FY 2023-24. In addition to this, there is also an increase in the exemption from Rs. 2.5 lacs to Rs. 3 lacs under the new tax regime. These changes are, however, not applicable to the old tax regime. This is to say that, slab rates under the old tax regime are as they were for the Financial Year 2022-23.
Also Read: Know About The Income Tax Slabs FY 2022-23 | FY 2021-22
Changes in the Income Tax Slab Rate under the New Tax Regime
Also Read: Tax Rebate under the Old & New Tax Regime
Note:
Under the new tax regime, the income tax slab rates are the same for all age groups depending upon their income.
Income Tax Slab rates under the old tax regime
Key Differences Between Old & New Tax Regime
The new tax regime offers some relief to salaried individuals, senior citizens, HUFs, domestic companies, as well as cooperative societies in India. When comparing the old tax regime and the new tax regime, here are some things to note:
– The new tax regime offers six different new income tax slabs for individuals and HUFs in comparison to three in the old tax regime. These are as follows:
New Tax Regime has lower slab rates which helps in reducing income tax liability. However, the majority of exemptions, allowances, and deductions are not allow under this regime. These are as follows:
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However, some of the important deductions have been retained under the new tax regime which are as follows:
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Also Read: Exemptions, Allowances, & Deductions under the Old & New Tax Regime
– Domestic companies have been given a concessional tax rate of 22% under section 115 BAA in the new tax regime versus 25% in the old regime as long as they do not claim exemptions or deductions such as:
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– Manufacturing companies registered on or after March 1, 2016, and not claiming any exemptions or deductions, can choose to file taxes under section 115BA and pay 25% as opposed to 30%, as long as they do not claim deductions or exemptions.
– However, deduction under Section 80JJAA, for employment of new employees, has been retained so has deductions under Section 80M for dividends declared.
– Manufacturing companies that were registered on or after October 1, 2019, and have begun manufacturing on or before 31st March 2023 can pay a tax of 15% under Section 115BAB as per the new tax regime.
– Resident cooperative societies can choose to pay a reduced tax rate of 22% as per section 115BAD as long as they don’t claim deductions and exemptions. This is especially useful for societies with an income of more than ₹20,000 per annum.
Surcharge rates under the new and old tax regime
FAQs
Yes, the rebate under Section 87A is still available under both new and old tax regimes. However, the amount of rebate limit is not the same under these regimes. In the case of the new tax regime, if the person has a total income of Rs. 7 income, then he can claim a rebate of Rs. 25,000. On the other, if the person opts for the old tax regime and has a total income of Rs. 5 lacs, then he can claim a rebate of Rs. 12,500.
In case you are having income from salary, then you switch between the tax regimes during every financial year. However, if you also happen to have business income, then you have only once in a lifetime option to choose between the tax regimes.
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