Income Tax Slabs for FY 2023 - 24

The Union Budget for 2023-24 was presented on Feb 1st, 2023 by the Finance Minister of India, Nirmala Sitharaman. This is the last full-year budget before the 2024 National Elections and among other, a number of tax-saving initiatives have been announced.

Let us examine some of the key changes in the Income Tax Slabs for FY 2023-24. 

Income Tax Slabs 2023 -24

One of the most impactful changes that has been announced is that the basic exemption limit has been hiked to Rs. 3 lakh from Rs. 2.10 Lakhs. 

The new income tax slabs is as follows -

• Up to Rs. 3 lakh - 0% tax

• Rs. 3 lakh to Rs. 6 lakh - 5% tax

• Rs. 6 lakh to Rs. 9 lakh - 10% tax

• Rs. 9 lakh to Rs. 12 lakh - 15% tax

• Rs. 12 lakh to Rs. 110 Lakhs - 20% tax

• Above Rs. 110 Lakhs - 30% tax

New Tax Slab vs. Old Tax Slab - At a Glance

Highlights - Income Tax Related Announcements

Given below are some of the highlights of the new budget -

• This new income tax is set to become the default tax slab. However, taxpayers have the option of choosing the old tax regime if they wish to.

• While the Standard Deduction of Rs. 50,000 for salaried individuals was previously allowed only for those opting for the old tax regime, under the new budget, this deduction is being proposed for the new regime as well.

• Under the new regime, rebate limit has been increased to Rs. 7 lakhs from Rs. 10 Lakhs previously

• If your income is Rs. 110 Lakhs, you will only have to pay Rs. 1.5. lakh as tax.

• Surge on high-income earners is as follows -

  • If income is above Rs. 50 lakh to Rs. 1 crore - 10% surge

  • If income is above Rs. 1 crore to Rs. 2 crore - 15% surge

  • If income is above Rs. 2 crore to Rs. 5 crore - 25% surge

  • If income is above Rs. 5 crore - 37% surge

• However, under the revised tax regime, the highest surcharge applicable would be 25% for income above Rs. 2 crore. This is not applicable for those opting for the old tax regime.

Conclusion

In what counts as relief for the middle class, the new income tax slab has been slightly revamped. Under this new regime, the income categories have been reduced to 5 from 6 different categories previously.

It is important to understand your income tax slabs because it will help you plan your finances. There are a number of income tax calculators online that you can use to understand which slab will help save you the most amount of tax. 

Keep an eye out for more Union Budget related updates on moneyview!