What is the Income Tax Slab?
Income Tax in India follows a tax slab system. Here, taxpayers’ income is categorised as ranges or slabs and certain tax rates are assigned to them. This is a progressive system of taxation where people earning more income are taxed at higher income tax slabs in proportion to their higher income.
By introducing income tax slabs in India, the Government of India aims to achieve a fair taxation system for all citizens. With this aim, the government revises the tax slabs periodically and announces amendments to the Union Budget accordingly.
Now that you know what income tax slabs are, let's take you through the different slabs under the old and new tax regimes for a better understanding.
For several years, many people purchased life insurance simply as a tax-saving method. The truth is, life insurance plays a crucial role in every sound financial plan. Before we create financial plans for the upcoming financial year, let’s better understand the new rules and regulations. In February 2023, the finance minister outlined the budget for the upcoming year, which included a few changes to the new tax regime. The finance minister reduced the number of tax slabs and extended the standard deduction to the salaried class and pensioners as well.
Below is a tabular version of the latest income tax slabs applicable for individuals and HUF:
Taxable Income | Old Tax Regime | New Tax Regime |
Up to Rs.2.5 lakh | Exempted | Exempted |
Greater than Rs.2.5 lakh to Rs.3 lakh | 5% | Exempted |
Greater than Rs.3 lakh to Rs. 5 lakh | 5% | 5% |
Greater than Rs.5 lakh to Rs.6 lakh | 20% | 5% |
Greater than Rs.6 lakh to Rs. 9 lakh | 20% | 10% |
Greater than Rs.9 lakh to Rs.10 lakh | 20% | 15% |
Greater than Rs.10 lakh to Rs.12 lakh | 30% | 15% |
Greater than Rs.12 lakh to Rs.15 lakh | 30% | 20% |
Above Rs.15 lakh | 30% | 30% |
Income Tax Slab Rates For FY 2022-23 (AY 2023-24)
a. New Tax regime
| Income Slabs | Income Tax Rates |
| ₹0 - ₹2,50,000 | – |
| ₹2,50,000 - ₹5,00,000 | 5% (tax rebate u/s 87A is available) |
| ₹5,00,000 - ₹7,50,000 | 10% |
| ₹7,50,000 - ₹10,00,000 | 15% |
| ₹10,00,000 - ₹12,50,000 | 20% |
| ₹12,50,000 - ₹15,00,000 | 25% |
| >₹15,00,000 | 30% |
Refer to the above image for the rates applicable to FY 2023-24 (AY 2024-25) for the upcoming tax filing season.
b. Old Tax regime
Income tax slabs for individual aged below 60 years & HUF
| Income Slabs | Individuals Below The Age Of 60 Years and NRIs |
|---|---|
| Up to Rs 2.5 lakh | NIL |
| Rs 2.5 lakh - Rs 5 lakh | 5% |
| Rs 5 lakh - Rs 10 lakh | 20% |
| > Rs 10 lakh | 30% |
NOTE:
- Income tax exemption limit is up to Rs 2,50,000 for Individuals, HUF below 60 years aged and NRIs.
- Surcharge and cess will be applicable as discussed above
Income tax slab for individual aged above 60 years to 80 years
| Income Slabs | Tax Slabs for Senior Citizens (Aged 60 Years But Less Than 80 Years) |
|---|---|
| Rs 0 - Rs 3 lakh | NIL |
| Rs 3 lakh - Rs 5 lakh | 5% |
| Rs 5 lakh - Rs 10 lakh | 20% |
| > Rs 10 | 30% |
NOTE:
- Income tax exemption limit is up to Rs.3 lakh for senior citizens aged above 60 years but less than 80 years.
- Surcharge and cess will be applicable as discussed above
Income tax slab for Individual aged more than 80 years
| Income Slabs | Income Tax Slab for Super Senior Citizens (Aged 80 Years And Above) |
|---|---|
| Rs 0 - Rs 5 lakh* | NIL |
| Rs 5 lakh - Rs 10 lakh | 20% |
| > Rs 10 lakh | 30% |
NOTE:
- Income tax exemption limit is up to Rs 5 lakh for super senior citizen aged above 80 years.
- Surcharge and cess will be applicable as discussed above