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Trusted by 1L+ Indians
Want to Achieve any of the below Goals upto 80% faster?
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Trusted by 3 Crore+ Indians
Want to Achieve any of the below
Goals upto 80% faster?
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Trusted by 3 Crore+ Indians
Want to Achieve any of the below
Goals upto 80% faster?
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Trusted by 3 Crore+ Indians
Want to Achieve any of the below Goals upto 80% faster?
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Trusted by 3 Crore+ Indians
Want to Achieve any of the below Goals upto 80% faster?
Dream Home
Dream Wedding
Dream Car
Retirement
1st Crore
Income Tax Slabs for FY 2023-24, 2024-25
Income Tax Slabs for FY 2023-24, 2024-25
In the complex world of Indian taxation, income tax is meticulously calculated based on income tax slabs that vary according to the financial year (FY) and the assessment year (AY). For the current fiscal landscape, the financial year under consideration is 2024-25, while the assessment year is 2025-26. Let’s dive into the intricate tapestry of income tax slabs, exploring both the new and old tax regimes, and shed light on recent updates and their implications.
Understanding Income Tax Slabs
Income tax slabs are a system designed to ensure that the tax burden is equitably distributed based on income levels. This progressive system ensures that those with higher incomes contribute more towards the nation's finances. Essentially, as income increases, the tax rate applied to each portion of income rises, creating a tiered effect that scales with earnings. This approach is aimed at ensuring fairness in taxation and preventing undue financial strain on lower-income individuals.
Note: As per the Interim Budget for 2024-25, no modifications have been made to the income tax slabs. However, it’s crucial to remember that several changes announced in Budget 2023 will be applicable for the financial year 2023-24 (April 1, 2023, to March 31, 2024).
Income Tax Slabs Under the New Tax Regime for FY 2023-24, FY 2024-25
The new tax regime, introduced to simplify the tax structure, offers revised slabs with distinct tax rates. As of the Union Budget announcement on July 23, 2024, the following slabs and rates apply:
Total Income Up to Rs 3 Lakhs: Nil
From Rs 3,00,001 to Rs 7,00,000: 5%
From Rs 7,00,001 to Rs 10,00,000: 10%
From Rs 10,00,001 to Rs 12,00,000: 15%
From Rs 12,00,001 to Rs 15,00,000: 20%
Above Rs 15,00,000: 30%
These new tax slabs were initially presented in Budget 2023 and aim to offer a streamlined approach to tax computation. The table below outlines the revised slabs introduced under the new tax regime:
Up to Rs 3,00,000: Nil
Rs 3,00,001 to Rs 6,00,000: 5% (with Tax Rebate under Section 87A)
Rs 6,00,001 to Rs 9,00,000: 10% (with Tax Rebate under Section 87A up to Rs 7 lakh)
Rs 9,00,001 to Rs 12,00,000: 15%
Rs 12,00,001 to Rs 15,00,000: 20%
Above Rs 15,00,000: 30%
Changes Announced in the New Tax Regime in Budget 2024
The Budget 2024 introduced several updates to the new tax regime, further refining the tax structure:
Default Tax Regime: The new tax regime will now be the default option for taxpayers. If no specific choice is made, income will be taxed under the new tax slabs.
Increased Basic Exemption Limit: The basic exemption limit has been increased to Rs 3 lakh from Rs 2.5 lakh.
Standard Deduction: A standard deduction of Rs 50,000 has been introduced for salaried individuals and pensioners.
Family Pensioners: Family pensioners can now claim a standard deduction of Rs 15,000.
Reduction in Surcharge Rate: The highest surcharge rate has been reduced from 37% to 25%.
Increased Rebate under Section 87A: The rebate has been increased to a taxable income of Rs 7 lakh, offering a rebate of Rs 25,000, up from Rs 5 lakh with a rebate of Rs 12,500.
Income Tax Slabs Under the Old Tax Regime
For those preferring the traditional approach, the old tax regime remains available. Here are the income tax slabs for various categories of individuals:
Individuals (Below 60 Years):
Up to Rs 2,50,000: Nil
Rs 2,50,001 to Rs 3,00,000: 5%
Rs 3,00,001 to Rs 5,00,000: 5%
Rs 5,00,001 to Rs 10,00,000: 20%
Above Rs 10,00,000: 30%
Senior Citizens (60 Years and Above, but Less Than 80 Years):
Up to Rs 2,50,000: Nil
Rs 2,50,001 to Rs 3,00,000: Nil
Rs 3,00,001 to Rs 5,00,000: 5%
Rs 5,00,001 to Rs 10,00,000: 20%
Above Rs 10,00,000: 30%
Super Senior Citizens (80 Years and Above):
Up to Rs 2,50,000: Nil
Rs 2,50,001 to Rs 3,00,000: Nil
Rs 3,00,001 to Rs 5,00,000: Nil
Rs 5,00,001 to Rs 10,00,000: 20%
Above Rs 10,00,000: 30%
Tax Slabs for Domestic Companies
Domestic companies are taxed based on their choice of regime and various conditions:
Section 115BAB: For companies registered on or after October 1, 2019, and commencing manufacturing on or before March 31, 2023, the tax rate is 15%.
Section 115BAA: For companies opting for this section, where total income is calculated without claiming specified deductions, exemptions, or additional depreciation, the tax rate is 22%.
Section 115BA: For companies registered on or after March 1, 2016, in the manufacturing sector and not claiming deductions as specified, the tax rate is 25%.
Turnover Less Than Rs 400 Crores: 25%
Other Domestic Companies: 30%
Surcharge Applicable for Companies:
7% of income tax where total income exceeds Rs 1 crore
12% of income tax where total income exceeds Rs 10 crores
10% for companies opting for Section 115BAA and 115BAB
Additional Health & Education Cess: 4%
Income Tax Rate for Partnership Firms or LLPs
Partnership firms and Limited Liability Partnerships (LLPs) are taxed at a flat rate of 30%, with a 12% surcharge applicable for incomes exceeding Rs 1 crore and a Health and Education Cess of 4%.
Comparison of Income Tax Slabs Under New Regime – Before and After Budget 2023
Here’s a comparative view of the tax slabs under the new regime before and after Budget 2023:
Before Budget 2023 (Until March 31, 2023):
Up to Rs 2,50,000: NIL
Rs 2,50,000 to Rs 3,00,000: 5%
Rs 3,00,000 to Rs 5,00,000: 5%
Rs 5,00,000 to Rs 6,00,000: 10%
Rs 6,00,000 to Rs 7,50,000: 10%
Rs 7,50,000 to Rs 9,00,000: 15%
Rs 9,00,000 to Rs 10,00,000: 15%
Rs 10,00,000 to Rs 12,00,000: 20%
Rs 12,00,000 to Rs 12,50,000: 20%
Rs 12,50,000 to Rs 15,00,000: 25%
Above Rs 15,00,000: 30%
After Budget 2023 (From April 1, 2023):
Up to Rs 2,50,000: NIL
Rs 2,50,000 to Rs 3,00,000: NIL
Rs 3,00,000 to Rs 5,00,000: 5%
Rs 5,00,000 to Rs 6,00,000: 5%
Rs 6,00,000 to Rs 7,50,000: 10%
Rs 7,50,000 to Rs 9,00,000: 10%
Rs 9,00,000 to Rs 10,00,000: 15%
Rs 10,00,000 to Rs 12,00,000: 15%
Rs 12,00,000 to Rs 12,50,000: 20%
Rs 12,50,000 to Rs 15,00,000: 20%
Above Rs 15,00,000: 30%
Tax Slab Rate for FY 2024-25 (AY 2025-26), New Tax Regime – Why an Option to Choose is Given?
Under the new tax regime for FY 2024-25 (AY 2025-26), taxpayers have the flexibility to choose between two tax regimes:
New Tax Regime: This option allows taxpayers to benefit from lower tax rates but requires them to forgo certain exemptions and deductions.
Old Tax Regime: Taxpayers who prefer to avail themselves of various exemptions and deductions can continue to opt for the old tax regime, which might involve paying taxes at higher rates but provides broader opportunities for tax-saving.
Conditions for Opting for the New Tax Regime
Taxpayers who opt for the new regime must forgo several deductions and exemptions that are permissible under the old tax regime. These include:
Leave Travel Allowance
Conveyance allowance
House Rent Allowance
Relocation allowance
Children's education allowance
Professional tax
Daily expenses incurred during employment
Helper allowance
Deductions under Chapter VI-A (e.g., Sections 80C, 80D, 80E) except Section 80CCD(2)
Standard deduction on salary
Interest on housing loan (Section 24)
Other special allowances (Section 10(14))
Common Deductions Allowed Under the New Tax Rate Regime
Under the new tax regime, the following deductions are still permissible:
Investment in a Notified Pension Scheme under Section 80CCD(2)
Conveyance allowance for expenses incurred in traveling to work
Depreciation under Section 32 (excluding additional depreciation)
Deduction for employment of new employees under Section 80JJAA
Allowance for travel related to employment or on transfer
Transport allowance for specially-abled individuals
Articles Related to Income Tax
Understanding the broader context of income tax in India involves exploring various related aspects:
Tax in India
Income Tax Act
Income Tax Online Payment
Income Tax Return
Income Tax Returns Filing Due Date
TDS - Tax Deducted at Source
Kinds of Taxable Income Sources in India
Types of Taxable Income in India
Taxable income in India encompasses a broad spectrum of sources, including:
Business Income: Profits from business activities are taxed after accounting for permissible deductions.
Salary or Pension: Base salary, allowances, and pension amounts are subject to tax, with rates varying by age.
Property Income: Income from renting out properties is taxable according to income tax slabs.
Capital Gains Income: Gains from selling assets like gold, real estate, or stocks are taxed based on their duration and the nature of the gain.
Lottery, Races, and Other Income: Winnings from lotteries and horse races are taxed separately from regular income slabs.
You May Also Be Interested To Know:
Tax on Mutual Funds
Documents Required to File Income Tax Returns
How to Save Tax in India
Top Reasons for Receiving an Income Tax Notice
Basics of Income Tax for Beginners
How to Avoid LTCG Tax?
Distinction Between Old and New Tax Regimes
Since its introduction in the fiscal year 2020-21, the new tax regime offers an alternative to the traditional system. For FY 2024-25 (AY 2025-26), taxpayers can choose between the new and old regimes.
Key Differences Include:
Tax Rates and Slabs: The new regime provides lower tax rates and additional slabs compared to the old regime, affecting tax computations.
Deductions and Exemptions: The new regime eliminates most deductions and exemptions available under the old regime. While the old regime permits a multitude of deductions (up to 70), the new regime simplifies taxation with fewer deductions but lower rates.
In summary, understanding the nuances of income tax slabs and the distinctions between different tax regimes is essential for optimizing tax liabilities and making informed financial decisions.
In the complex world of Indian taxation, income tax is meticulously calculated based on income tax slabs that vary according to the financial year (FY) and the assessment year (AY). For the current fiscal landscape, the financial year under consideration is 2024-25, while the assessment year is 2025-26. Let’s dive into the intricate tapestry of income tax slabs, exploring both the new and old tax regimes, and shed light on recent updates and their implications.
Understanding Income Tax Slabs
Income tax slabs are a system designed to ensure that the tax burden is equitably distributed based on income levels. This progressive system ensures that those with higher incomes contribute more towards the nation's finances. Essentially, as income increases, the tax rate applied to each portion of income rises, creating a tiered effect that scales with earnings. This approach is aimed at ensuring fairness in taxation and preventing undue financial strain on lower-income individuals.
Note: As per the Interim Budget for 2024-25, no modifications have been made to the income tax slabs. However, it’s crucial to remember that several changes announced in Budget 2023 will be applicable for the financial year 2023-24 (April 1, 2023, to March 31, 2024).
Income Tax Slabs Under the New Tax Regime for FY 2023-24, FY 2024-25
The new tax regime, introduced to simplify the tax structure, offers revised slabs with distinct tax rates. As of the Union Budget announcement on July 23, 2024, the following slabs and rates apply:
Total Income Up to Rs 3 Lakhs: Nil
From Rs 3,00,001 to Rs 7,00,000: 5%
From Rs 7,00,001 to Rs 10,00,000: 10%
From Rs 10,00,001 to Rs 12,00,000: 15%
From Rs 12,00,001 to Rs 15,00,000: 20%
Above Rs 15,00,000: 30%
These new tax slabs were initially presented in Budget 2023 and aim to offer a streamlined approach to tax computation. The table below outlines the revised slabs introduced under the new tax regime:
Up to Rs 3,00,000: Nil
Rs 3,00,001 to Rs 6,00,000: 5% (with Tax Rebate under Section 87A)
Rs 6,00,001 to Rs 9,00,000: 10% (with Tax Rebate under Section 87A up to Rs 7 lakh)
Rs 9,00,001 to Rs 12,00,000: 15%
Rs 12,00,001 to Rs 15,00,000: 20%
Above Rs 15,00,000: 30%
Changes Announced in the New Tax Regime in Budget 2024
The Budget 2024 introduced several updates to the new tax regime, further refining the tax structure:
Default Tax Regime: The new tax regime will now be the default option for taxpayers. If no specific choice is made, income will be taxed under the new tax slabs.
Increased Basic Exemption Limit: The basic exemption limit has been increased to Rs 3 lakh from Rs 2.5 lakh.
Standard Deduction: A standard deduction of Rs 50,000 has been introduced for salaried individuals and pensioners.
Family Pensioners: Family pensioners can now claim a standard deduction of Rs 15,000.
Reduction in Surcharge Rate: The highest surcharge rate has been reduced from 37% to 25%.
Increased Rebate under Section 87A: The rebate has been increased to a taxable income of Rs 7 lakh, offering a rebate of Rs 25,000, up from Rs 5 lakh with a rebate of Rs 12,500.
Income Tax Slabs Under the Old Tax Regime
For those preferring the traditional approach, the old tax regime remains available. Here are the income tax slabs for various categories of individuals:
Individuals (Below 60 Years):
Up to Rs 2,50,000: Nil
Rs 2,50,001 to Rs 3,00,000: 5%
Rs 3,00,001 to Rs 5,00,000: 5%
Rs 5,00,001 to Rs 10,00,000: 20%
Above Rs 10,00,000: 30%
Senior Citizens (60 Years and Above, but Less Than 80 Years):
Up to Rs 2,50,000: Nil
Rs 2,50,001 to Rs 3,00,000: Nil
Rs 3,00,001 to Rs 5,00,000: 5%
Rs 5,00,001 to Rs 10,00,000: 20%
Above Rs 10,00,000: 30%
Super Senior Citizens (80 Years and Above):
Up to Rs 2,50,000: Nil
Rs 2,50,001 to Rs 3,00,000: Nil
Rs 3,00,001 to Rs 5,00,000: Nil
Rs 5,00,001 to Rs 10,00,000: 20%
Above Rs 10,00,000: 30%
Tax Slabs for Domestic Companies
Domestic companies are taxed based on their choice of regime and various conditions:
Section 115BAB: For companies registered on or after October 1, 2019, and commencing manufacturing on or before March 31, 2023, the tax rate is 15%.
Section 115BAA: For companies opting for this section, where total income is calculated without claiming specified deductions, exemptions, or additional depreciation, the tax rate is 22%.
Section 115BA: For companies registered on or after March 1, 2016, in the manufacturing sector and not claiming deductions as specified, the tax rate is 25%.
Turnover Less Than Rs 400 Crores: 25%
Other Domestic Companies: 30%
Surcharge Applicable for Companies:
7% of income tax where total income exceeds Rs 1 crore
12% of income tax where total income exceeds Rs 10 crores
10% for companies opting for Section 115BAA and 115BAB
Additional Health & Education Cess: 4%
Income Tax Rate for Partnership Firms or LLPs
Partnership firms and Limited Liability Partnerships (LLPs) are taxed at a flat rate of 30%, with a 12% surcharge applicable for incomes exceeding Rs 1 crore and a Health and Education Cess of 4%.
Comparison of Income Tax Slabs Under New Regime – Before and After Budget 2023
Here’s a comparative view of the tax slabs under the new regime before and after Budget 2023:
Before Budget 2023 (Until March 31, 2023):
Up to Rs 2,50,000: NIL
Rs 2,50,000 to Rs 3,00,000: 5%
Rs 3,00,000 to Rs 5,00,000: 5%
Rs 5,00,000 to Rs 6,00,000: 10%
Rs 6,00,000 to Rs 7,50,000: 10%
Rs 7,50,000 to Rs 9,00,000: 15%
Rs 9,00,000 to Rs 10,00,000: 15%
Rs 10,00,000 to Rs 12,00,000: 20%
Rs 12,00,000 to Rs 12,50,000: 20%
Rs 12,50,000 to Rs 15,00,000: 25%
Above Rs 15,00,000: 30%
After Budget 2023 (From April 1, 2023):
Up to Rs 2,50,000: NIL
Rs 2,50,000 to Rs 3,00,000: NIL
Rs 3,00,000 to Rs 5,00,000: 5%
Rs 5,00,000 to Rs 6,00,000: 5%
Rs 6,00,000 to Rs 7,50,000: 10%
Rs 7,50,000 to Rs 9,00,000: 10%
Rs 9,00,000 to Rs 10,00,000: 15%
Rs 10,00,000 to Rs 12,00,000: 15%
Rs 12,00,000 to Rs 12,50,000: 20%
Rs 12,50,000 to Rs 15,00,000: 20%
Above Rs 15,00,000: 30%
Tax Slab Rate for FY 2024-25 (AY 2025-26), New Tax Regime – Why an Option to Choose is Given?
Under the new tax regime for FY 2024-25 (AY 2025-26), taxpayers have the flexibility to choose between two tax regimes:
New Tax Regime: This option allows taxpayers to benefit from lower tax rates but requires them to forgo certain exemptions and deductions.
Old Tax Regime: Taxpayers who prefer to avail themselves of various exemptions and deductions can continue to opt for the old tax regime, which might involve paying taxes at higher rates but provides broader opportunities for tax-saving.
Conditions for Opting for the New Tax Regime
Taxpayers who opt for the new regime must forgo several deductions and exemptions that are permissible under the old tax regime. These include:
Leave Travel Allowance
Conveyance allowance
House Rent Allowance
Relocation allowance
Children's education allowance
Professional tax
Daily expenses incurred during employment
Helper allowance
Deductions under Chapter VI-A (e.g., Sections 80C, 80D, 80E) except Section 80CCD(2)
Standard deduction on salary
Interest on housing loan (Section 24)
Other special allowances (Section 10(14))
Common Deductions Allowed Under the New Tax Rate Regime
Under the new tax regime, the following deductions are still permissible:
Investment in a Notified Pension Scheme under Section 80CCD(2)
Conveyance allowance for expenses incurred in traveling to work
Depreciation under Section 32 (excluding additional depreciation)
Deduction for employment of new employees under Section 80JJAA
Allowance for travel related to employment or on transfer
Transport allowance for specially-abled individuals
Articles Related to Income Tax
Understanding the broader context of income tax in India involves exploring various related aspects:
Tax in India
Income Tax Act
Income Tax Online Payment
Income Tax Return
Income Tax Returns Filing Due Date
TDS - Tax Deducted at Source
Kinds of Taxable Income Sources in India
Types of Taxable Income in India
Taxable income in India encompasses a broad spectrum of sources, including:
Business Income: Profits from business activities are taxed after accounting for permissible deductions.
Salary or Pension: Base salary, allowances, and pension amounts are subject to tax, with rates varying by age.
Property Income: Income from renting out properties is taxable according to income tax slabs.
Capital Gains Income: Gains from selling assets like gold, real estate, or stocks are taxed based on their duration and the nature of the gain.
Lottery, Races, and Other Income: Winnings from lotteries and horse races are taxed separately from regular income slabs.
You May Also Be Interested To Know:
Tax on Mutual Funds
Documents Required to File Income Tax Returns
How to Save Tax in India
Top Reasons for Receiving an Income Tax Notice
Basics of Income Tax for Beginners
How to Avoid LTCG Tax?
Distinction Between Old and New Tax Regimes
Since its introduction in the fiscal year 2020-21, the new tax regime offers an alternative to the traditional system. For FY 2024-25 (AY 2025-26), taxpayers can choose between the new and old regimes.
Key Differences Include:
Tax Rates and Slabs: The new regime provides lower tax rates and additional slabs compared to the old regime, affecting tax computations.
Deductions and Exemptions: The new regime eliminates most deductions and exemptions available under the old regime. While the old regime permits a multitude of deductions (up to 70), the new regime simplifies taxation with fewer deductions but lower rates.
In summary, understanding the nuances of income tax slabs and the distinctions between different tax regimes is essential for optimizing tax liabilities and making informed financial decisions.
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