Income Tax slab rate FY 2023-24 & AY 2024-25

From April 1, 2023:

In Finance act 2023, major changes are made in new tax regime:

1. The new income tax regime will be your default tax regime. If you want to opt old tax regime, you have to separately choose it at the beginning of the financial year. To choose new form 10IEA is inserted. Other than Businessman and professionals taxpayers can switch to any regime any year.

2. New Tax Regime is also available for Individual, HUF, AOP, BOI, AJP (other than cooperative societies), earlier it was available only for Individual & HUF

3. Basic exemption limit is increased from Rs.2.50 lakh to Rs.3.00 lakh (under the new tax regime)

4. Rebate under section 87A is increased from Rs.5 lakh to Rs.7 lakh (under the new tax regime)

Income Tax Slab Rate as per Old Tax Regime for FY 2023-24 & AY 2024-25

Surcharge:

Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-

Surcharge for FY 2023-24

Note: 1) The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax under sections 111A, 112, 112A and 115AD.

Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.

2) The maximum rate of surcharge on tax payable on dividend income shall be 15%.

3) The surcharge rate for AOP with all members as a company, shall be capped at 15%.

4) The surcharge rate is nil if the total income of a ‘specified fund’ as referred to section 10(4D) includes any income in respect of securities as given under section 115AD(1)(a). [For assessment year 2024-25]

However, marginal relief is available from surcharge in following manner-

a) in case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

b) in case where net income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

c) in case where net income exceeds Rs. 2 crore but doesn’t exceed Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore.

d) in case where net income exceeds Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore.

Health and Education Cess : Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.

Note: The Health and Education Cess is nil if the total income of a ‘specified fund’ as referred to section 10(4D) includes any income in respect of securities as given under section 115AD(1)(a).

[For assessment year 2024-25] AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+HEC) of “adjusted total income” computed as per section 115JC.

Notes: In case of a unit located in an IFSC which derives its income solely in convertible foreign exchange, the rate of AMT shall be at the rate of 9% instead of existing rate of 18.50%.

The rate of AMT shall be 15% instead of existing rate of 18.5% in case of a co-operative society.

Rebate u/s 87A:

A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500, whichever is less.

Income Tax Slab Rate as per New Tax Regime for FY 2023-24 & AY 2024-25

It means Following new deductions are now allowed in new Tax Regime:

• Standard Deduction of Rs.50,000 to salaried individual,
• Family pension Deduction u/s 57 ( Rs.15,000 or 1/3 of Pension, whichever is lower)
• New Deduction u/s 80CCH (2) amount paid or deposited in the Agni veer Corpus Fund.
• Earlier one more deduction was allowed under new regime, which is still continued is section 80 CCD (2) – Employer contribution to pension fund

Notes: The maximum rate of surcharge on tax payable on dividend income or capital gain referred to in Section 111A, Section 112, Section 112A or Section 115AD shall be 15%.

However, marginal relief is available from surcharge in following manner-

1.in case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

2. in case where net income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

3. in case where net income exceeds Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs.2 crore by more than the amount of income that exceeds Rs. 2 crore.

Health and Education Cess : Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.

AMT : The assessee opting for this scheme have been kept out of the purview of Alternate Minimum Tax (AMT). Further the provision relating to the computation, carry forward and set off of AMT credit shall not apply to these assessees.

Rebate u/s 87A:

For Assessment Year 2023-24, a resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500, whichever is less.

From Assessment Year 2024-25, a maximum rebate of Rs. 25,000 is allowed under section 87A, If the total income of an individual, who is opting for the new tax scheme under Section 115BAC(1A), is up to Rs. 7,00,000.

Further, if the total income of the resident individual (opting section 115BAC(1A) exceeds Rs. 7,00,000 and the tax payable on such income exceeds the difference between the total income and Rs. 7,00,000, he can claim a rebate with marginal relief to the extent of the difference between the tax payable on such total income and the amount by which it exceeds Rs. 7,00,000

If an assessee has opted for new tax regime, the provisions of AMT shall not be applicable. Conditions to be satisfied: The option to pay tax at lower rates shall be available only if the total income of assessee is computed without claiming following exemptions or deductions: a) Leave Travel concession [Section 10(5)]

b) House Rent Allowance [Section 10(13A)]

c) Official and personal allowances (other than those as may be prescribed) [Section10(14)]

d) Allowances to MPs/MLAs [Section 10(17)]

e) Allowances for income of minor [Section 10(32)]

f) Deduction for units established in Special Economic Zones (SEZ) [Section 10AA];

g) Standard Deduction [Section 16(ia)] [Allowable for Assessment Year 2024-25]

h) Entertainment Allowance [Section 16((ii)]

i) Professional Tax [Section 16(iii)]

j) Interest on housing loan [Section 24(b)]

k) Additional depreciation in respect of new plant and machinery [Section 32(1)(iia)];

l) Deduction for investment in new plant and machinery in notified backward areas [Section 32AD];

m) Deduction in respect of tea, coffee or rubber business [Section 33AB];

n) Deduction in respect of business consisting of prospecting or extraction or production of petroleum or natural gas in India [Section 33ABA];

o) Deduction for donation made to approved scientific research association, university college or other institutes for doing scientific research which may or may not be related to business [Section 35(1)(ii)];

p) Deduction for payment made to an Indian company for doing scientific research which may or may not be related to business [Section 35(1)(iia)];

q) Deduction for donation made to university, college, or other institution for doing research in social science or statistical research [Section 35(1)(iii)];

r) Deduction for donation made for or expenditure on scientific research [Section35(2AA)];

s) Deduction in respect of capital expenditure incurred in respect of certain specified businesses, i.e., cold chain facility, warehousing facility, etc. [Section 35AD];

t) Deduction for expenditure on agriculture extension project [Section 35CCC];

u) Deduction for family Pension [Section 57(iia)] [Allowable for Assessment Year 2024-25]

v) Deduction in respect of certain incomes other than specified under Section 80JJAA, 80CCD(2),80CCH(2) for the contribution made by the central government to the Agniveer Corpus Fund (Allowable for Assessment Year 2024-25) and deduction under section 80LA for Unit located in IFSC [Part C of Chapter VI-A].

Total income of the assessee is calculated after claiming depreciation under section 32, other than additional depreciation, and without adjusting brought forward losses and depreciation from any earlier year (if such loss or depreciation pertains to any deduction under the aforesaid sections).

Further, loss under the head house property can’t be set off against other heads of Income. Moreover, such loss and depreciation will not be carried forward. If the assessee has any unabsorbed depreciation, relating to additional depreciation, which has not been given full effect, the corresponding adjustment shall be made to WDV of the block of assets in the prescribed manner

In case the assessee has business or professional income, this option shall be exercised on or before the due date for furnishing the returns of income.

Once the assessee has exercised the option for any previous year, it cannot be subsequently withdrawn for the same or any other previous year. The option once exercised for any previous year can be withdrawn only once in subsequent previous year (other than the year in which it was exercised) and thereafter, he shall never be eligible to exercise this option again except where such person ceases to have any business income.

An assessee having income other than income from a business or profession can opt for the old tax scheme every year. I

n other words, he has the option to opt out of the old tax scheme every year if he has opted for it in the preceding year.

Where an assessee earning income from a business or profession has opted for the old tax scheme, he can withdraw from the old tax scheme only once for a previous year other than the year in which it was exercised.

Once such an option has been exercised, the assessee shall never be eligible to exercise such an option again, except where such person ceases to have any income from business or profession.

Where a person has income from business or profession, he has to exercise the option for the old tax scheme, in a prescribed manner, on or before the due date for furnishing the return of income under Section 139(1). Whereas a person having income (other than income from business or profession) has to exercise the option along with the return of income to be furnished under Section 139(1).

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