Income Tax Slabs and Rates for FY 2023-24 (AY 2023-24)

The Indian income tax system underwent significant changes with the Union Budget 2023. The revised tax slabs for the financial year (FY) 2023-24, applicable in the assessment year (AY) 2024-25, impact individuals, Hindu Undivided Families (HUFs), senior citizens, and other entities. Understanding these tax slabs and rates is essential for effective financial planning.

The new tax regime continues to be the default option, offering lower tax rates but fewer exemptions and deductions. Taxpayers can still opt for the old regime if they find it more beneficial. The revised slabs provide relief to lower-income groups while maintaining higher tax rates for higher income brackets.

This guide will provide detailed information on the latest income tax slabs, exemptions, and deductions under the new tax regime. It will also explain tax scenarios and implications for different taxpayer categories, helping you make informed decisions regarding your tax liabilities in India for FY 2023-24.

Latest income tax slabs for FY 2023-24 after budget 2023

The Indian government introduced a revised income tax regime in the Union Budget 2023, bringing changes to the tax slabs for FY 2023-24 (AY 2024-25). The new tax system simplifies taxation, offering lower rates but without many exemptions and deductions. However, taxpayers can still opt for the old regime if it is more beneficial.

Income tax slabs under the new regime:

Income up to Rs. 3,00,000 – Nil

Rs. 3,00,001 to Rs. 6,00,000 – 5%

Rs. 6,00,001 to Rs. 9,00,000 – 10%

Rs. 9,00,001 to Rs. 12,00,000 – 15%

Rs. 12,00,001 to Rs. 15,00,000 – 20%

Income above Rs. 15,00,000 – 30%

The new regime automatically applies unless the taxpayer chooses the old regime, which allows deductions under sections like 80C and 80D. For individuals earning up to Rs. 7 lakh annually, a rebate under Section 87A eliminates tax liability.

Income tax slabs in FY 2023-24 (AY 2024-25) for HUF and individuals

For Hindu Undivided Families (HUFs) and individual taxpayers, the tax slabs remain similar to the standard rates in the new regime. However, the old regime provides tax benefits through various deductions and exemptions.

Tax slabs for HUFs and individuals (new regime):

Annual Income	Tax Rate
Up to Rs. 3,00,000	Nil
Rs. 3,00,001 – Rs. 6,00,000	5%
Rs. 6,00,001 – Rs. 9,00,000	10%
Rs. 9,00,001 – Rs. 12,00,000	15%
Rs. 12,00,001 – Rs. 15,00,000	20%
Above Rs. 15,00,000	30%

Under the old regime, the basic exemption limit remains Rs. 2.5 lakh. However, deductions under Sections 80C, 80D, HRA, and others can be claimed, making it beneficial for taxpayers with significant investments.

Income tax slab for super senior citizens in AY 2024-25 (FY 2023-24)

Super senior citizens (above 80 years) enjoy higher exemption limits under the old tax regime. The new regime does not differentiate between age groups.

Tax slabs for super senior citizens (old regime):

Annual Income	Tax Rate
Up to Rs. 5,00,000	Nil
Rs. 5,00,001 – Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

For super senior citizens opting for the new regime, the standard slab rates apply. However, those choosing the old regime can claim deductions under Section 80C, 80D (health insurance), and 80TTB (interest income exemption).

Income tax slabs & rates for senior citizens in AY 2024-25 (FY 2023-24)

Senior citizens (aged 60 to 80 years) receive tax benefits under the old regime. However, no separate slab exists under the new tax regime.

Tax slabs for senior citizens (old regime):

Annual Income	Tax Rate
Up to Rs. 3,00,000	Nil
Rs. 3,00,001 – Rs. 5,00,000	5%
Rs. 5,00,001 – Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

Additionally, a rebate under Section 87A applies for taxable income up to Rs. 5 lakh in the old regime and Rs. 7 lakh in the new regime.

Income tax slab for AOP, BOI & AJP in AY 2024-25

Associations of Persons (AOP), Bodies of Individuals (BOI), and Artificial Juridical Persons (AJP) are taxed differently based on income levels.

Tax slabs for AOP, BOI & AJP (AY 2024-25):

Annual Income	Tax Rate
Up to Rs. 2,50,000	Nil
Rs. 2,50,001 – Rs. 5,00,000	5%
Rs. 5,00,001 – Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

In addition, surcharge and cess apply depending on income levels. For income above Rs. 1 crore, a surcharge of 10% to 37% may be levied.

Understanding income tax scenarios in the new regime - FY 2023-24 (AY 2024-25)

The new tax regime offers lower tax rates but removes many deductions. It is beneficial for those with fewer investments or those who want a simplified tax filing.

Key scenarios under the new regime:

Salaried employees with no deductions: A lower tax burden than the old regime.

Salaried employees with deductions: The old regime may be better due to Section 80C, 80D, and HRA deductions.

Senior citizens: If they rely on interest income, the old regime provides more tax relief under Section 80TTB.

Business owners and freelancers: The new regime allows a flat tax structure but removes deductions like Section 80C, home loan benefits, and business expenses.

Taxpayers should evaluate their income structure, investments, and expenses before choosing the most suitable option.

What are the exemptions/deductions unavailable under the new tax regime in FY 23-24

The new tax regime removes many exemptions and deductions available in the old regime. Some key deductions unavailable include:

Section 80C – No deduction for PPF, ELSS, EPF, life insurance, NSC, or tuition fees.

Section 80D – No deduction for medical insurance premiums.

House Rent Allowance (HRA) – Cannot be claimed under the new regime.

Standard deduction of Rs. 50,000 – Not applicable for salaried individuals and pensioners.

Interest on home loan (Section 24b) – No deduction available for self-occupied property.

Leave Travel Allowance (LTA) & Professional tax – Not applicable.

Taxpayers earning below Rs. 7 lakh benefit from the rebate under Section 87A, making the new regime tax-free up to this limit.

Conclusion

The Union Budget 2023 introduced key income tax changes, including revised slabs in the new tax regime. While the new regime offers lower tax rates, it eliminates many deductions, making it suitable for individuals with minimal investments.

Senior citizens, salaried individuals with significant 80C & 80D deductions, and home loan borrowers may find the old regime more beneficial. However, those seeking a simplified filing process with minimal tax-saving investments may benefit from the new regime.

Taxpayers must compare both regimes and assess their income, expenses, and deductions before making a choice. The option to switch remains available every financial year for salaried individuals but is restricted for businesses and professionals.

By carefully evaluating both options, taxpayers can optimise their income tax liability and ensure maximum savings.