Income Tax Slab Rates For AY 2024-25 & 2025-26 as amended by finance act 2024

Rate this post

1. In case of an Individual (resident or non-resident) or HUF or Association of Person or Body of Individual or any other artificial juridical person

Old Slab Rates
Individuals
(Other than resident senior and super senior citizen)
Net Income RangeRate of Income-tax
Assessment Year 2025-26Assessment Year 2024-25
Up to Rs. 2,50,000
Rs. 2,50,000 to Rs. 5,00,0005%5%
Rs. 5,00,000 to Rs. 10,00,00020%20%
Above Rs. 10,00,00030%30%
Resident Senior Citizen
(who is 60 years or more but less than 80 years at any time during the previous year)
Net Income RangeRate of Income-tax
Assessment Year 2025-26Assessment Year 2024-25
Up to Rs. 3,00,000
Rs. 3,00,000 to Rs. 5,00,0005%5%
Rs. 5,00,000 to Rs. 10,00,00020%20%
Above Rs. 10,00,00030%30%
Resident Super Senior Citizen
(who is 80 years or more at any time during the previous year)
Net Income RangeRate of Income-tax
Assessment Year 2025-26Assessment Year 2024-25
Up to Rs. 5,00,000
Rs. 5,00,000 to Rs. 10,00,00020%20%
Above Rs. 10,00,00030%30%
Hindu Undivided Family (Including AOP, BOI and Artificial Juridical Person)
Net Income RangeRate of Income-tax
Assessment Year 2025-26Assessment Year 2024-25
Up to Rs. 2,50,000
Rs. 2,50,000 to Rs. 5,00,0005%5%
Rs. 5,00,000 to Rs. 10,00,00020%20%
Above Rs. 10,00,00030%30%

Add:

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

Rate of Surcharge
Assessment Year 2024-25 & 2025-26Assessment Year 2023-24
Range of IncomeRange of Income
Rs. 50 Lakhs to Rs. 1 CroreRs. 1 Crore to Rs. 2 CroresRs. 2 Crores to Rs. 5 Croresabove Rs. 5 croreRs. 50 Lakhs to Rs. 1 CroreRs. 1 Crore to Rs. 2 CroresRs. 2 Crores to Rs. 5 Croresabove Rs. 5 crore
10%15%25%37%10%15%25%37%

Note:

(1) The enhanced surcharge of 25% & 37%, as the case may be, is not levied, on dividend income or income chargeable to tax under sections 111A112112A and 115AD(1)(b). Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.

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

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

Marginal relief is available from surcharge in following manner-

  i.  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.

 ii.  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.

iii.  in case where net income exceeds Rs. 2 crores but doesn’t exceed Rs. 5 crores, 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 crores by more than the amount of income that exceeds Rs. 2 crores.

iv.  in case where net income exceeds Rs. 5 crores, 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 crores by more than the amount of income that exceeds Rs. 5 crores.

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

Notes:

(1) 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).

(2) 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.

(3) If the total income of resident individual, who is opting for the new tax scheme under section 115BAC(1A), is up to Rs. 7,00,000, a higher rebate of Rs. 25,000 is allowed under section 87A.Such higher rebate is also subject to marginal relief (For Assessment Year 2024-25 & 2025-26).

Alternate Minimum Tax (AMT)

An individual is liable to pay Alternate Minimum Tax where tax payable by him, on his total income computed as per normal provisions of the Act, is less than 18.5% of ‘adjusted total income’. In such a case the ‘adjusted total income’ is taken as income of such individual and he shall be liable to pay tax at the rate of 18.5% of such ‘adjusted total income’.

However, AMT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of an assessee other than a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange.

1.1. Special tax Rate for Individual and HUFs

New Tax Slab

New tax regime (also known as alternative tax regime) is optional for the Assessment Year 2023-24. An individual or HUF has to exercise the option under Section 115BAC(5) to avail its benefit.

However, for the Assessment Year 2024-25 & 2025-26, the new tax regime is the default tax regime for the Individual or HUF. Further, the benefit of new tax regime has also extended to Association of Persons (AOP)/Body of Individuals (BOI) and Artificial Juridical Person (AJP) w.e.f. Assessment Year 2024-25. If one to opt-out from default new tax regime, he has to exercise the option under Section 115BAC(6).

The tax rates under the new tax regime are as under:

For Assessment Year 2024-25 & 2025-26:

Net Income RangeTax rate
Upto Rs. 3,00,000Nil
From Rs. 3,00,001 to Rs. 6,00,0005%
From Rs. 6,00,001 to Rs.9,00,00010%
From Rs. 9,00,001 to Rs. 12,00,00015%
From Rs. 12,00,001 to Rs. 15,00,00020%
Above Rs. 15,00,00030%

Add:

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

Range of Income
Rs. 50 Lakhs to Rs. 1 CroreRs. 1 Crore to Rs. 2 CroresAbove 2 Crores
10%15%25%

Note: The enhanced surcharge of 25% or 37% is not levied, on income by way of dividend or from income chargeable to tax under sections 111A112112A and 115AD(1)(b). Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%. Also, the surcharge rate for AOP with all members as a company, shall be capped at 15%.

However, enhanced surcharge rate of 37% is not applicable for assessees opting for tax regime under section 115BAC (from Assessment Year 2024-25).

Further, the surcharge rate is nil if the total income of a ‘specified fund’ as referred to in 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-

  i.  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.

 ii.  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.

 iii.  in case where net income exceeds Rs. 2 crores, 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 crores by more than the amount of income that exceeds Rs. 2 crores.

iv. in case where net income exceeds Rs. 5 crores, 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 crores by more than the amount of income that exceeds Rs. 5 crores. 

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

Notes:

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

(b) 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 of income by which it exceeds Rs. 7,00,000

(c) If an assessee has opted for new tax regime, the provisions of AMT shall not be applicable.

2. Partnership Firm

For the Assessment Years 2024-25 & 2025-26, a partnership firm (including LLP) is taxable at 30%.

Add:

(aSurcharge : The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).

(bHealth and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge

Alternate Minimum Tax (AMT)

A partnership firm is liable to pay Alternative Minimum Tax where tax payable by it, on total income computed as per normal provisions of the Act, is less than 18.5% of ‘adjusted total income’. In such a case the ‘adjusted total income’ is taken as the income of the firm and it shall be liable to pay tax at the rate of 18.5% of such ‘adjusted total income’.

However, AMT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of an assessee other than a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange.

3. Local Authority

For the Assessment Years 2024-25 & 2025-26, a local authority is taxable at 30%.

Add:

(a Surcharge : The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).

(b Health and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

Alternate Minimum Tax (AMT)

A Local Authority is liable to pay Alternative Minimum Tax where tax payable by it, on total income computed as per normal provisions of the Act, is less than 18.5% of ‘adjusted total income’. In such a case the ‘adjusted total income’ is taken as the income of the firm and it shall be liable to pay tax at the rate of 18.5% of such ‘adjusted total income’.

However, AMT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange.

4. Domestic Company

Income-tax rates applicable in case of domestic companies for assessment years 2023-24 and 2024-25 are as follows:

Domestic Company 
Assessment Year 2024-25Assessment Year 2023-24
♦ Where its total turnover or gross receipt during the previous year 2020-21 does not exceed Rs. 400 croreNA25%
♦ Where its total turnover or gross receipt during the previous year 2021-22 does not exceed Rs. 400 crore25%NA
♦ Any other domestic company30%30%

Add:

(aSurcharge : The amount of income-tax shall be increased by a surcharge at the rate of 7% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 12% of such tax, where total income exceeds ten crore rupees. The surcharge shall be subject to marginal relief, which shall be as under:

 (i)  Where income exceeds Rs. 1 crore but not exceeding Rs. 10 crore, the total amount payable as income-tax and surcharge shall not exceed 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.

 (ii)  Where income exceeds Rs. 10 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore

(bHealth and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

Minimum Alternate Tax (MAT)

A domestic company is liable to pay Minimum Alternate Tax where tax payable by it, on total income computed as per normal provisions of the Act, is less than 15% of ‘book profit’. In such a case the ‘book profit’ is taken as the income of the company and it shall be liable to pay tax at the rate of 15% of such ‘book profit’.

However, MAT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange.

4.1. Special Tax rates applicable to a domestic company

The special Income-tax rates applicable in case of domestic companies are as follows:

Domestic Company
♦ Where it opted for section 115BA25%
♦ Where it opted for Section 115BAA22%
♦ Where it opted for Section 115BAB15%

Surcharge : The rate of surcharge in case of a company opting for taxability under Section 115BAA or Section 115BAB shall be flat 10% irrespective of amount of total income.

Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

MAT : The domestic company who has opted for special taxation regime under Section 115BAA & 115BAB is exempted from provision of MAT. However, no exemption is available in case where section 115BA has been opted.

5. Foreign Company

Assessment Years 2023-24 and 2024-25

Nature of IncomeTax Rate
Royalty received from Government or an Indian concern in pursuance of an agreement made with the Indian concern after March 31, 1961, but before April 1, 1976, or fees for rendering technical services in pursuance of an agreement made after February 29, 1964 but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government50%
Any other income40%

Add:

(a)  Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 2% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 5% of such tax, where total income exceeds ten crore rupees. However, the surcharge shall be subject to marginal relief, which shall be as under:

 (i)  Where income exceeds one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

 (ii)  Where income exceeds ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.

(b)  Health and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

Minimum Alternate Tax (MAT)

A foreign company is liable to pay Minimum Alternate Tax where tax payable by it, on total income computed as per normal provisions of the Act, is less than 15% of ‘book profit’. In such a case the ‘book profit’ is taken as the income of the company and it shall be liable to pay tax at the rate of 15% of such ‘book profit’.

However, the provisions of MAT do not apply in case of foreign companies if it does not have permanent establishment (PE) in India or opts for presumptive taxation scheme of Section 44BSection 44BBSection 44BBA or Section 44BBB.

6. Co-operative Society

Assessment Years 2024-25 & 2025-26

Taxable incomeTax Rate
Up to Rs. 10,00010%
Rs. 10,000 to Rs. 20,00020%
Above Rs. 20,00030%

Add:

(a) (a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 7% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 12% of such tax, where total income exceeds ten crore rupees. However, the surcharge shall be subject to marginal relief, which shall be as under:

(i) Where income exceeds one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

(ii) Where income exceeds ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.

(b) Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

Note:

(a) A co-op. society is liable to pay Alternate Minimum Tax where tax payable by it, on total income computed as per normal provisions of the Act, is less than 15% of ‘adjusted total income’. In such a case the ‘adjusted total income’ is taken as the income of co-op. society and it shall be liable to pay tax at the rate of 15% of such ‘adjusted total income’.

(b) If the assessee is a unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, the rate of AMT will be 9%.

6.1. Alternative Tax regime for Co-operative societies

Income-tax Act allows a co-operative society to choose from the following alternative taxation regime subject to fulfilment of prescribed conditions:

SectionConditionsTax rate
Section 115BAE  •  The co-operative society is set up and registered on or after 01-04-2023;  •  It is engaged in manufacture or production of any article or thing;  •  It commences manufacturing on or before 31-03-2024 ; and  •  It does not claim specified exemption, incentive or deduction.15% (Income from manufacturing activities)
Section 115BADIf co-operative society does not claim specified exemption, incentive or deduction22%

Add:

(a) Surcharge: The surcharge is levied at a rate of 10% on the amount of income-tax irrespective of the total income of such co-operative society.

(b) Health & Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of 4% of such income-tax and surcharge.

Note:

(a) If a co-operative society has exercised the option of Section 115BAD or Section 115BAE, the provisions of AMT shall not be applicable. Further, the provisions regarding computation and carry forward of AMT credit shall also be not applicable.




Visit www.cagurujiclasses.com for practical courses

Pooja Gupta

CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

Disclaimer:- The opinions presented are exclusively those of the author and CA Guruji Classes. The material in this piece is intended purely for informational purposes and for individual, non-commercial consumption. It does not constitute expert guidance or an endorsement by any organization. The author, the organization, and its associates are not liable for any form of loss or harm resulting from the information in this article, nor for any decisions made based on it. Furthermore, no segment of this article or newsletter should be employed for any intention unless granted in written form, and we maintain the legal right to address any unauthorized utilization of our article or newsletter.

CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

2 thoughts on “Income Tax Slab Rates For AY 2024-25 & 2025-26 as amended by finance act 2024”

  1. The explanation clarifies lots of doubts. However if taxation of capital gains, especially from share market and Mutual Funds, under old regime and new regime, would have made the article more beneficial.

    Please let me know if this aspect is covered in a separate video.

    D S Shahapurkar
    7020982688

    Reply

Leave a Comment