Income tax slabs and rates for FY 2023-24(AY 2024-25) under old and new regimes

Before listing out the new slabs in the budget 2023, the finance minister announced that the Old Tax Regime will only be available on request now, and what was known as the New Tax Regime so far will thus be considered the default regime. The taxpayers can choose the regime while filing income tax returns.

The following income tax deductions are available both in the old tax regime and the new tax regime:

• Standard deduction of Rs.50000 (Fifty thousand) to salaried individuals, and deduction from family pension up to Rs.15000 (Fifteen thousand), allowed.
• Death-cum-retirement benefit,
• Commutated value of pensions,
• The amount received on VRS up to Rs 5 lakh,
• Employee Provident Fund money,
• Money received as scholarship for education,
• Cash received as awards constituted in the public interest,
• Short-term withdrawals and maturity amount from the National Pension Scheme,
• The leave encashment is up to 10 months average salary for non-government employees is exempt up to Rs.25 lakhs. This limit was 3 lakhs since 2002.

Income Tax slabs for FY 2023-24(AY-2024-25) under the new tax regime are as under.

This time the Government offers certain concessions to those individuals who opt for the new tax regime. A tax rebate of up to Rs 25,000 under section 87A is allowed to the new tax regime assessee whose income is within Rs.7 lakh after standard deduction and he will not have to pay any tax. Earlier standard deductions were earlier allowed only under the old regime, this time standard deductions to the salaried class and pensioners were also allowed in the new tax regime.

Further, the new tax regime slab rates are not differentiated based on age group. If your income is beyond Rs.7 lakh per annum after subtracting tax rebates under section 87A and standard deductions under section 16 (ia), your slab-wise tax liability will be as below.

Note: In addition to the applicable tax stated above, an Education Cess of 4% of the total Income Tax is payable by all taxpayers.

Surcharge: 10% of the Income Tax is payable where taxable income is more than Rs. 1 crore.

Old Tax regime:

This year no change in tax slabs or tax rates of last year. Tax rebates and deductions remain the same in FY 2023-24 (AY 2024-25) like in previous years.

In addition to deductions available under points (a) to (i) mentioned above, you may claim deductions and rebates like  Leave Travel Allowance (LTA), House Rent Allowance (HRA), Conveyance, Daily expenses in the course of employment, Relocation allowance, Helper allowance, Children education allowance, Other special allowances [Section 10(14)], Professional tax, Interest on housing loan (Section 24), Chapter VI-A deduction (80C, 80D, 80E, 80EEA, 80EEB, 80 TTA, 80TTB, etc.). To know the maximum deductions that you can claim under sections 80C to 80U, do click ‘Eligible Rebate and Deductions’. In case you do not know how to calculate the rebate under the house rent allowance click HRA rebate

Income Tax slabs for FY 2023-24(AY-2024-25) under the old tax regime are as under.

Under the old tax regime slab rates are differentiated based on the age group of the taxpayers. If your income is beyond Rs.5 lakh per annum after subtracting tax rebate under section 87A (maximum Rs.12500/-and standard deductions under section 16 (ia) maximum Rs.50000/- your slab-wise tax liability will be as under. (Do note for family pensioners maximum standard deductions allowed is only Rs.15000/-).

Note: In addition to the applicable tax stated above, the Education Cess of 4% of the total of Income Tax payable by all the taxpayers.

Surcharge: 10% of the Income Tax is payable where taxable income is more than Rs. 1 crore.

Tax slabs for Senior Citizens

If you are a senior citizen (born on or before 31.04.1964) and your income is over Rs.5 lakh per annum after all deductions and rebates, your slab-wise tax liability will be as below.

Note: In addition to the applicable tax stated above, the Education Cess of 4% of the total Income Tax payable by all taxpayers.

Surcharge: 10% of the Income Tax is payable where taxable income is more than Rs. 1 crore.

Tax Slabs for Super Senior Citizens

If you are a super senior citizen of age 80 years and above (born on or before 31.03.1944, and your income is beyond Rs.5 lakh per annum after all deductions and rebates, your slab-wise tax liability will be as below.

Note you are not eligible for a rebate under section 87A.

Note: In addition to the applicable tax stated above, an Education Cess of 4% of the total Income Tax is payable by all taxpayers.

Surcharge: 10% of the Income Tax is payable where taxable income is more than Rs. 1 crore.

Conclusion:

If your annual income is within Rs.5 lakh after all eligible rebates and deductions, you can assess your income under the old tax regime as you need not pay income tax for the present assessment year. In case, your income exceeds Rs.5 lakhs there is no benefit for you under the old scheme.   You may opt for tax assessment under the new tax regime because new income tax rates are lower compared to the old tax rate and up to an income of Rs.7 lakhs with no tax payable.