Income tax is a tax collected by the government on the income individuals earn above a certain amount.\u00a0<\/span><\/p>\nIncome tax in India is collected on the basis of the income tax slab system.\u00a0<\/span><\/p>\n\n- Different rates of income tax is levied on different amounts of income earned.<\/span><\/li>\n
- Only income above a certain amount is taxed.\u00a0<\/span><\/li>\n<\/ul>\n
For example, a person earning Rs 11 lakhs as income would fall under the Rs 9 lakhs to Rs 12 lakhs slab. The rate applicable to this income tax slab would be 15% on the amount exceeding Rs 9 lakhs.\u00a0<\/span><\/p>\nTo calculate this:<\/span><\/p>\n11,00,000 (-) 9,00,000 = 2,00,000<\/span><\/p>\nTherefore, this person would pay Rs 45,000 plus 15% of 2,00,000 which is 30,000 \u2013 bringing the total tax payable to Rs 75,000.<\/span><\/p>\nHere are the revised income tax rates, with the revised slabs for the financial year 2023-24.<\/p>\n
Budget 2023 Updated & New Income Tax Slabs<\/b><\/h2>\n\n\n\n| Income\u00a0<\/b><\/td>\n | Tax rate<\/b><\/td>\n<\/tr>\n\n| Up to Rs. 3,00,000<\/span><\/td>\n | 0%<\/span><\/td>\n<\/tr>\n\n| Rs. 300,001 – Rs. 6,00,000<\/span><\/td>\n | 5% on income exceeding Rs 3,00,000\u00a0<\/span><\/td>\n<\/tr>\n\n| Rs. 6,00,001 – Rs. 900,000<\/span><\/td>\n | Rs 15,000 + 10% on income exceeding Rs 6,00,000<\/span><\/td>\n<\/tr>\n\n| Rs. 9,00,001 – Rs. 12,00,000<\/span><\/td>\n | Rs 45,000 + 15% on income exceeding Rs 9,00,000<\/span><\/td>\n<\/tr>\n\n| Rs. 12,00,001 – Rs. 1500,000<\/span><\/td>\n | Rs 90,000 + 20% on income exceeding Rs 12,00,000<\/span><\/td>\n<\/tr>\n\n| Above Rs. 15,00,000<\/span><\/td>\n | Rs 150,000 + 30% on income exceeding Rs 15,00,000<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n For individuals who earn income below Rs 3,00,000 no tax is levied. Previously, this minimum taxable income was Rs 2,50,000. Anybody earning income above Rs 3,00,000 will have to pay 5% tax on every rupee that is more than Rs 3,00,000.<\/p>\n Income Tax Slab for Senior Citizens<\/h2>\n(Individuals between 60 and 80 Years of Age)<\/p>\n \n\n\n| Income Earned<\/b><\/td>\n | Tax Rates<\/b><\/td>\n<\/tr>\n\n| < Rs 3,00,000<\/span><\/td>\n | Nil<\/span><\/td>\n<\/tr>\n\n| Rs 3,00,001 – Rs 5,00,000<\/span><\/td>\n | 5%<\/span><\/td>\n<\/tr>\n\n| Rs 5,00,001 – Rs 10,00,000<\/span><\/td>\n | 20%<\/span><\/td>\n<\/tr>\n\n| > Rs 10,00,001<\/span><\/td>\n | 30%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Note: An additional 4% health and education cess is applicable on the tax amount\u00a0<\/em><\/p>\nIncome Tax Slab for Super Senior Citizens<\/h2>\n(Individuals Above 80 Years of Age)<\/p>\n \n\n\n| Income Earned<\/b><\/td>\n | Tax Rates<\/b><\/td>\n<\/tr>\n\n| < Rs 5,00,000<\/span><\/td>\n | Nil<\/span><\/td>\n<\/tr>\n\n| Rs 5,00,001 – Rs 10,00,000<\/span><\/td>\n | 20%<\/span><\/td>\n<\/tr>\n\n| > Rs 10,00,001<\/span><\/td>\n | 30%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Note: An additional 4% health and education cess is applicable on the tax amount<\/em><\/p>\nIncome Tax Rebate Budget 2023<\/b><\/h2>\n\n\n\n| Income Tax Rebate U\/S 87A<\/b><\/td>\n | Existing<\/b><\/td>\n | Proposed<\/b><\/td>\n<\/tr>\n\n| Total income (upto)<\/span><\/td>\n | 5,00,000<\/span><\/td>\n | 7,00,000<\/span><\/td>\n<\/tr>\n\n| Tax rebate (maximum)<\/span><\/td>\n | 12,500<\/span><\/td>\n | 25,000<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n Income tax rebate is the refund given to a person who paid more tax than liable. Any excess money is refunded at the end of the year along with interest.<\/p>\n With the 2023 Union Budget, anybody earning an income less than Rs 7 lakh can avail income tax rebate.<\/p>\n Previously, the minimum income that a person had to earn in order to get this rebate was 5 lakhs.\u00a0<\/span><\/p>\nThe previous maximum tax rebate of income tax was Rs 12,500. With the Budget 2023, the maximum tax rebate of income tax is Rs 25,000.\u00a0<\/span><\/p>\nSurcharge for Income Tax FY 2023-24<\/h2>\n\n\n\n| Income Earned<\/b><\/td>\n | Surcharge Rate<\/b><\/td>\n<\/tr>\n\n| Rs 50 lakhs to Rs 1 crore<\/span><\/td>\n | 10%<\/span><\/td>\n<\/tr>\n\n| Rs 1 crore to Rs 2 crores<\/span><\/td>\n | 15%<\/span><\/td>\n<\/tr>\n\n| Rs 2 crores to Rs 5 crores<\/span><\/td>\n | 25%<\/span><\/td>\n<\/tr>\n\n| More than Rs 5 crores<\/span><\/td>\n | 37%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Note: 37% surcharge\u00a0 does not apply to individuals, HUF, BOI, AJP and AOP under new regime<\/em><\/p>\nDifferences Between New Tax Regime and Old Tax Regime Budget 2023-24<\/b><\/h2>\nIn the Union Budget 2023, it was announced that the default option would no longer be the old tax regime. From this year onwards, the default option will be the new tax regime.\u00a0<\/span><\/p>\nLet\u2019s look at the differences between the old and new regimes.\u00a0<\/span><\/p>\n\n\n\n| Criteria<\/b><\/td>\n | Old Tax Regime<\/b><\/td>\n | New Tax Regime<\/b><\/td>\n<\/tr>\n\n| Tax Rates<\/span><\/td>\n | Tax rates were higher under the old tax regime. For example, the highest tax rate was 30%<\/span><\/td>\n | Under the new tax regime, the highest tax rate is 22%.\u00a0<\/span><\/td>\n<\/tr>\n\n| Tax Exemptions<\/span><\/td>\n | There were more exemptions under the old tax regime.\u00a0<\/span><\/td>\n | Under the new tax regime, only limited deductions are available.\u00a0<\/span><\/td>\n<\/tr>\n\n| Tax Structure<\/span><\/td>\n | The old tax regime had a complicated tax structure.\u00a0<\/span><\/td>\n | Under the new tax regime, the tax structure is simpler and more streamlined.\u00a0<\/span><\/td>\n<\/tr>\n\n| Taxability of Investments<\/span><\/td>\n | Investments was taxed at higher rates under the old tax regime.<\/span><\/td>\n | Under the new tax regime, investments are taxed at lower rates. For example, investments in equity-oriented mutual funds are now only taxed at 10%.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n Old <\/b>Tax Regime<\/b> vs New Tax Regime: Which is Better?<\/b><\/h2>\nThe new tax regime of India is beneficial for taxpayers because it offers a more simplified and reduced tax rate structure. It also offers other tax benefits like exemptions for certain incomes and deductions for certain expenses.<\/span><\/p>\nThe new regime also includes a number of measures to reduce the compliance burden, such as allowing taxpayers to file their taxes electronically and reducing the number of documents that need to be submitted in order to file returns.\u00a0<\/span><\/p>\nThis new regime is more beneficial to taxpayers earning lower incomes since it offers lower income tax slabs and more benefits to those without investments.\u00a0The old regime is beneficial to those earning high incomes who opt for investing in high tax saving schemes.<\/p>\n However, the old tax regime may be better for some taxpayers, depending on specific circumstances. Ultimately, it is best to consult with a tax professional to decide <\/span>which regime is best for each individual situation.<\/span><\/p>\nDeductions & Exemptions – New Tax Regime vs Old Tax Regime<\/h2>\nWith the new Income Tax Regime there have been many changes to the deductions and exemptions available to people paying tax on their income. Here is a comparison between the old tax regime and the new regime of the deductions and exemptions available.<\/p>\n \n\n\n| Particulars<\/b><\/td>\n | Old Tax Regime<\/b><\/td>\n | New Tax Regime<\/b>
\n<\/b>(Until 31st March 2023)<\/b><\/td>\n | New Tax Regime (From 1st April 2023)\u00a0<\/b><\/td>\n<\/tr>\n\n| Minimum income for rebate eligibility<\/span><\/td>\n | Rs 5,00,000<\/span><\/td>\n | Rs 5,00,000<\/span><\/td>\n | Rs 7,00,000<\/span><\/td>\n<\/tr>\n\n| Standard Deduction<\/span><\/td>\n | Rs 50,000<\/span><\/td>\n | \u2013<\/span><\/td>\n | Rs 50,000<\/span><\/td>\n<\/tr>\n\n| Effective Tax-Free Salary income<\/span><\/td>\n | Rs 5,50,000<\/span><\/td>\n | Rs 5,00,000<\/span><\/td>\n | Rs 7,50,000<\/span><\/td>\n<\/tr>\n\n| Maximum rebate amount<\/span><\/td>\n | Rs 12,500<\/span><\/td>\n | Rs 12,500<\/span><\/td>\n | Rs 25,000<\/span><\/td>\n<\/tr>\n\n| HRA Exemption<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Leave Travel Allowance\u00a0<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Other Allowances\u00a0<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Standard Deduction<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n\n| Entertainment Allowance Deduction & Professional Tax<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Perquisites for official purposes<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n\n| Interest on home loan u\/s 24b on self-occupied or vacant property<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Interest on home loan on let out property\u00a0<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n\n| Deduction u\/s 80C*<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Employee contribution to EPS<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Employer\u2019s contribution to EPS<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n\n| Medical Insurance Premium – 80D<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Disabled individual – 80U<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Interest on education loan – 80E<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Interest on electric vehicle loan – 80EEB<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Donation to political party\/trust – 80G<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Savings Bank Interest u\/s 80TTA and 80TTB<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Other Chapter VI-A deductions<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u274c<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| All contributions to Agniveer Corpus Fund \u2013 80CCH<\/span><\/td>\n | \u2705<\/span><\/td>\n | Did not exist<\/span><\/td>\n | \u274c<\/span><\/td>\n<\/tr>\n\n| Deduction on family pension income<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n\n| Gifts up to Rs 5,000<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n\n| Exemption on voluntary retirement 10 (10C)<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n\n| Exemption on gratuity u\/s 10 (10)<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n\n| Exemption on Leave encashment u\/s 10 (10AA)<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n\n| Daily Allowance<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n\n| Transport Allowance for disabled person<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n\n| Conveyance Allowance<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n | \u2705<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n *EPF\/LIC\/ELSS\/PPF\/FD\/Children\u2019s tuition fee\u00a0<\/span><\/i><\/p>\n | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |