Income Tax slab Rates Budget-2023 The Union Budget 2023-24 presented by the Minister of Finance and Corporate Affairs, Smt. Nirmala Sitaraman has made
Income Tax slab Rates Budget-2023
The Union Budget 2023-24 presented by the Minister of Finance and Corporate Affairs, Smt. Nirmala Sitaraman has made significant announcements with respect to personal income tax that will benefit the hard-working middle class in India. The following are the five major announcements:
Increased Rebate Limit: The rebate limit has been increased to Rs. 7 lacks in the new tax regime, which means that persons with income up to Rs. 7 lacs will not have to pay any tax.
Change in Tax Structure: The tax structure has been changed in the new personal income tax regime by reducing the number of slabs to five and increasing the tax exemption limit to Rs. 3 lacs. The new tax rates range from nil for income up to Rs. 3 lacs to 30% for income above Rs. 15 lacs.
This will provide major relief to all taxpayers in the new regime. An individual with an annual income of Rs. 9 lacks will be required to pay only Rs. 45,000/-. This is only 5 per cent of his or her income. It is a reduction of 25 per cent on what he or she is required to pay now, i.e. Rs. 60,000/-. Similarly, an individual with an income of Rs. 15 lacs would be required to pay only Rs. 1.5 lakh or 10 per cent of his or her income, a reduction of 20 per cent from the existing liability of Rs. 1,87,500/.
Extension of Standard Deduction: The benefit of standard deduction has been extended to the new tax regime, providing relief to the salaried class and pensioners including family pensioners.
Reduced Maximum Tax Rate: The highest surcharge rate has been reduced from 37% to 25% in the new tax regime for income above Rs. 2 crores, reducing the maximum tax rate to 39% from 42.74%.
Extension of Tax Exemption on Leave Encashment: The limit of tax exemption on leave encashment has been extended to Rs. 25 lacs on the retirement of non-government salaried employees, in line with the government salaried class.
The new income tax regime has been made the default tax regime, but citizens will continue to have the option to avail the benefit of the old tax regime. These announcements are expected to provide substantial benefits to the working middle class and are a step towards a more tax-friendly environment for individuals.
for Individuals being (a) residents of India, & (b) age 60 years or more but less than 80 years at any time during FY 2023-24
for Individuals being (a) residents in India, & (b) age 80 years or more at any time during FY 2023-24
The amount of income tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A or the provisions of section 115BAC of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union, calculated, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act,—
Provided further that in case of an association of persons consisting of only companies as its members, the rate of surcharge on the amount of Income-tax shall not exceed fifteen per cent.:
Provided also that in the case of persons mentioned above having total income exceeding,—
The amount of income tax computed in accordance with the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union, calculated in the case of every cooperative society,––
The amount of income tax computed in accordance with the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall, in the case of every firm/local authority, having a total income exceeding one crore rupees, be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such income tax:
Provided that in the case of every firm/local authority mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
The amount of income tax computed in accordance with the provisions of section 111A or section 112 or 112A of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union calculated,—
Provided further that in the case of every company having a total income exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.
Increased Rebate Limit: The rebate limit has been increased to Rs. 7 lacks in the new tax regime, which means that persons with income up to Rs. 7 lacs will not have to pay any tax.
Change in Tax Structure: The tax structure has been changed in the new personal income tax regime by reducing the number of slabs to five and increasing the tax exemption limit to Rs. 3 lacs. The new tax rates range from nil for income up to Rs. 3 lacs to 30% for income above Rs. 15 lacs.
| Total Income (Rs.) | Rate (per cent) |
|---|---|
| Upto 3,00,000 | Nil |
| From 3,00,001 to 6,00,000 | 5 |
| From 6,00,001 to 9,00,000 | 10 |
| From 9,00,001 to 12,00,000 | 15 |
| From 12,00,001 to 15,00,000 | 20 |
This will provide major relief to all taxpayers in the new regime. An individual with an annual income of Rs. 9 lacks will be required to pay only Rs. 45,000/-. This is only 5 per cent of his or her income. It is a reduction of 25 per cent on what he or she is required to pay now, i.e. Rs. 60,000/-. Similarly, an individual with an income of Rs. 15 lacs would be required to pay only Rs. 1.5 lakh or 10 per cent of his or her income, a reduction of 20 per cent from the existing liability of Rs. 1,87,500/.
Extension of Standard Deduction: The benefit of standard deduction has been extended to the new tax regime, providing relief to the salaried class and pensioners including family pensioners.
Reduced Maximum Tax Rate: The highest surcharge rate has been reduced from 37% to 25% in the new tax regime for income above Rs. 2 crores, reducing the maximum tax rate to 39% from 42.74%.
Extension of Tax Exemption on Leave Encashment: The limit of tax exemption on leave encashment has been extended to Rs. 25 lacs on the retirement of non-government salaried employees, in line with the government salaried class.
The new income tax regime has been made the default tax regime, but citizens will continue to have the option to avail the benefit of the old tax regime. These announcements are expected to provide substantial benefits to the working middle class and are a step towards a more tax-friendly environment for individuals.
Tax Rates under the Old Regime
| Total Income (Rs.) | Tax Rate |
|---|---|
| up to Rs. 2,50,000 | Nil |
| 2,50,000 to 5,00,000 | 5% of the amount by which Total Income exceeds Rs.2,50,000 |
| 5,00,000 to 10,00,000 | Rs.12,500 + 20% of the amount by which Total Income exceeds Rs.5,00,000 |
| More than Rs 10,00,000 | Rs.1,12,500 + 30% of the amount by which Total Income exceeds Rs.10,00,000 |
for Individuals being (a) residents of India, & (b) age 60 years or more but less than 80 years at any time during FY 2023-24
| Total Income (Rs.) | Tax Rate |
|---|---|
| up to Rs. 3,00,000 | Nil |
| 3,00,000 to 5,00,000 | 5% of the amount by which Total Income exceeds Rs.3,00,000 |
| 5,00,000 to 10,00,000 | Rs.10,000 + 20% of the amount by which Total Income exceeds Rs.5,00,000 |
| More than Rs 10,00,000 | Rs.1,10,000 + 30% of the amount by which Total Income exceeds Rs.10,00,000 |
for Individuals being (a) residents in India, & (b) age 80 years or more at any time during FY 2023-24
| Total Income (Rs.) | Tax Rate |
|---|---|
| up to Rs. 5,00,000 | Nil |
| 5,00,000 to 10,00,000 | 20% of the amount by which Total Income exceeds Rs.5,00,000 |
| More than Rs 10,00,000 | Rs.1,00,000 + 30% of the amount by which Total Income exceeds Rs.10,00,000 |
The amount of income tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A or the provisions of section 115BAC of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union, calculated, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act,—
- (a) having a total income (including the income by way of dividend or income under the provisions of section 111A, section 112 and section 112A of the Income-tax Act) exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent. of such income tax;
- (b) having a total income (including the income by way of dividend or income under the provisions of section 111A, section 112 and section 112A of the Income-tax Act) exceeding one crore rupees, but not exceeding two crore rupees, at the rate of fifteen per cent. of such income tax;
- (c) having a total income (excluding the income by way of dividend or income under the provisions of section 111A, section 112 and section 112A of the Income-tax Act) exceeding two crore rupees but not exceeding five crore rupees, at the rate of twenty-five per cent. of such income tax;
- (d) having a total income (excluding the income by way of dividend or income under the provisions of section 111A, section 112 and section 112A of the Income-tax Act) exceeding five crore rupees, at the rate of thirty-seven per cent. of such income-tax; and
- (e) having a total income (including the income by way of dividend or income under the provisions of section 111A, section 112 and section 112A) exceeding two crore rupees but is not covered under clauses (c) and (d), shall be applicable at the rate of fifteen per cent. of such income tax:
Provided further that in case of an association of persons consisting of only companies as its members, the rate of surcharge on the amount of Income-tax shall not exceed fifteen per cent.:
Provided also that in the case of persons mentioned above having total income exceeding,—
- (a) fifty lakh rupees but not exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees;
- (b) one crore rupees but does not exceed two crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees;
- (c) two crore rupees but does not exceed five crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of two crore rupees by more than the amount of income that exceeds two crore rupees;
- (d) five crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of five crore rupees by more than the amount of income that exceeds five crore rupees
Other Than Individual Taxation
In the case of every cooperative society,—
| Income | Tax Rate / Tax |
|---|---|
| (1) where the total income does not exceed Rs.10,000. | 10 per cent. of the total income; |
| (2) where the total income exceeds Rs.10,000 but does not exceed Rs. 20,000 | Rs. 1,000 plus 20 per cent. of the amount by which the total income exceeds Rs.10,000; |
| (3) where the total income exceeds Rs. 20,000 | Rs. 3,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 20,000. |
The amount of income tax computed in accordance with the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union, calculated in the case of every cooperative society,––
- (a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of seven per cent. of such income tax;
- (b) having a total income exceeding ten crore rupees, at the rate of twelve per cent.:
In the case of every firm / every local authority,—
| Income | Tax Rate |
|---|---|
| On the whole the total income | 30 per cent. |
The amount of income tax computed in accordance with the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall, in the case of every firm/local authority, having a total income exceeding one crore rupees, be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such income tax:
Provided that in the case of every firm/local authority mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
In the case of a company,—
I. In the case of a domestic company,—
| Income | Tax Rate |
|---|---|
| (i) where its total turnover or the gross receipt in the previous year 2020-21 does not exceed four hundred crore rupees; | 25 per cent. of the total income; |
| (ii) other than that referred to in item (i) | 30 per cent. of the total income. |
II. In the case of a company other than a domestic company,—
| Total Income | Tax Rate |
|---|---|
| (i) on so much of the total income as consists of,— | - |
| (a) royalties received from the Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March 1961 but before the 1st day of April 1976; or | 50% |
| (b) fees for rendering technical services received from the Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February 1964 but before the 1st day of April 1976, | 50% |
| and where such agreement has, in either case, been approved by the Central Government. | 50% |
| (ii) on the balance, if any, of the total income | 40% |
The amount of income tax computed in accordance with the provisions of section 111A or section 112 or 112A of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union calculated,—
- (i) in the case of every domestic company,––
- (a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of seven per cent. of such income-tax; and
- (b) having a total income exceeding ten crore rupees, at the rate of twelve per cent. of such income tax;
- (ii) in the case of every company other than a domestic company,–
- (a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of two per cent. of such income-tax; and
- (b) having a total income exceeding ten crore rupees, at the rate of five per cent. of such income tax:
Provided further that in the case of every company having a total income exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.
COMMENTS