Income Tax Slab FY 2022-23 (AY 2023-24)

Now let us take a look at the income tax slabs for FY 2022-23 (AY 2023-24) under both tax regimes for resident individuals aged less than 60 years, Hindu Undivided Family (HUF) and Non-Resident Indians (NRI) with income in India:

In India, Senior Citizen tax payers are individuals above 60 years of age but below 80 years of age. These tax payers enjoy a higher basic exemption limit of Rs. 3 lakh as compared to individuals aged below 60 years under the old tax regime. However, this benefit of higher exemption is not available for senior citizen tax payers opting for the new tax regime. The below table summarizes the Income Tax slab rates in AY 2023-24 (FY 2022-23) for senior citizens in India:

Under current tax rules, super senior citizen tax payers are individuals who are aged 80 years or more. Under the old tax regime, super senior citizens have a higher basic exemption limit of Rs. 5 lakh as per income tax slab rates for the financial year 2022-23. This benefit is however not applicable under the new tax regime even though the slab rates for AY 2023-24 are lower as compared to the old tax regime. The below table summarizes the income tax slab and rates applicable to super senior citizens in FY 2022-23:

The Union Budget 2023 announced a change to number of income tax slabs applicable to the new tax regime for FY 2023-24 i.e. AY 2024-25 along with an increase in the tax exemption limit to Rs. 3 lakh. These changes are however not applicable to the old tax regime for FY 2023-24. Subsequent to these changes, the comparison of old tax regime (tax payer aged less than 60 years) vs. new tax regime slab rates for FY 2023-24 (AY 2024-25) looks like this:

Income tax is simply the tax you need to pay on income during a financial year. In India, the income tax system is progressive in nature i.e. if you have low income, you pay lower tax and if you have high income, you pay tax at a higher rate.

In order to determine the rate at which income tax needs to be paid, the Government of India has introduced income tax slabs and applicable rates. The income tax slab specifies a range within which a pre-determined rate of taxation is applicable. Based on the income tax slab a taxpayer falls in, the applicable income tax rate is identified which is used to calculate the income tax liability for the applicable fiscal.

Currently Indian tax payers can choose between 2 different tax regimes – the old tax regime and the new tax regime. The income tax slabs and rates for FY 2022-23 (AY 2023-24) are different based on whether the tax payer has chosen the new or the old tax regime to compute tax liability for the fiscal.

Income tax is applicable to various types of tax payers like individuals, trusts, corporations, etc. Therefore, there are multiple sources of income that can be subject to income tax in India. Here are some of the different types of taxable income in India as per the Income Tax Act, 1961:

In FY 2020-21, a new tax regime was introduced in addition to the prevailing old tax regime. In FY 2022-23 (AY 2023-24), tax payers can choose to opt for either of these income tax regimes and pay tax accordingly. There are 2 key differences between these two income tax regimes in India:

• Firstly, the new tax regime includes more tax slabs with lower tax rates as compared to the old tax regime. Hence, the income tax slabs for FY 2022-23 (AY 2023-24) are different based on whether you opt for the new or the old tax regime.
• Secondly, all the major deductions and exemptions such as Section 80C, Section 80D, etc. that are available under the old tax regime are not allowed if you opt for the new tax regime.

Deductions and exemptions allow tax payers to reduce their taxes by investing, saving or spending on specific financial instruments. The new tax regime offers you very few exemption or deduction options even though the income tax slab rates for AY 2023-24 are lower compared to the old tax regime. In contrast, the old tax regime provides up to 70 deductions or exemptions to lower your taxable income and income tax liability for FY 2022-23.

Also Read: New Tax Regime vs. Old Tax Regime

Taxpayers in the high income group with net taxable income exceeding 50 lakhs in assessment year 2023-24 i.e. financial year 2022-23, have to pay a surcharge on their income tax computed based on the income tax slab rates for FY 2022-23. The applicable rate of surcharge is as follows for FY 2022-23:

The option to choose between either the new tax regime or the old tax regime is currently available to individual tax payers in India. But before you make your choice, here are 5 key things you should keep in mind: