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Income Tax Slabs for AY 2024-25

This document outlines the income tax rates in India for the assessment years 2023-24 and 2024-25. It provides the tax slabs and rates for individual taxpayers including senior and super senior citizens. Surcharge is added depending on the total income amount. Health and education cess of 4% is also levied on income tax plus surcharge. Alternate minimum tax of 18.5% applies if normal tax is less than that amount. A new optional tax regime provides lower slabs and rates but removes certain deductions.

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Onkar Bandichhode
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24 views4 pages

Income Tax Slabs for AY 2024-25

This document outlines the income tax rates in India for the assessment years 2023-24 and 2024-25. It provides the tax slabs and rates for individual taxpayers including senior and super senior citizens. Surcharge is added depending on the total income amount. Health and education cess of 4% is also levied on income tax plus surcharge. Alternate minimum tax of 18.5% applies if normal tax is less than that amount. A new optional tax regime provides lower slabs and rates but removes certain deductions.

Uploaded by

Onkar Bandichhode
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

10/17/23, 10:45 PM Income Tax Department

Tax Rates
1. In case of an Individual (resident or non-resident)
Individuals
(Other than senior and super senior citizen)
Net Income Range Rate of Income-tax
Assessment Year 2024-25 Assessment Year 2023-24
Up to Rs. 2,50,000 - -
Rs. 2,50,000 to Rs. 5,00,000 5% 5%
Rs. 5,00,000 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 30%
Senior Citizen
(who is 60 years or more at any time during the previous year)
Net Income Range Rate of Income-tax
Assessment Year 2024-25 Assessment Year 2023-24
Up to Rs. 3,00,000 - -
Rs. 3,00,000 to Rs. 5,00,000 5% 5%
Rs. 5,00,000 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 30%
Super Senior Citizen
(who is 80 years or more at any time during the previous year)
Net Income Range Rate of Income-tax
Assessment Year 2024-25 Assessment Year 2023-24
Up to Rs. 5,00,000 - -
Rs. 5,00,000 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 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 Assessment Year 2023-25
Range of Income Range of Income
Rs. 50 Rs. 1 Crore Rs. 2 Crores above Rs. 50 Rs. 1 Crore Rs. 2 Crores above
Lakhs to Rs. to Rs. 2 to Rs. 5 Rs. 5 Lakhs to Rs. to Rs. 2 to Rs. 5 Rs. 5
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1 Crore Crores Crores crore 1 Crore Crores Crores 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, 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 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 section 10(4D)
includes any income in respect of securities as given under section 115AD(1)(a).
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 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.
iv. 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.
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).
(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
[Link] higher rebate is also subject to marginal relief.
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 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 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, 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).

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The tax rates under the new tax regime are as under:
(a) For Assessment Year 2023-24:
Net Income Range Tax rate
Up to 2,50,000 Nil
From 2,50,001 to 5,00,000 5%
From 5,00,001 to 7,50,000 10%
From 7,50,001 to 10,00,000 15%
From 10,00,001 to 12,50,000 20%
From 12,50,001 to 15,00,000 25%
Above Rs. 15,00,000 30%
(b) For Assessment Year 2024-25:
Net Income Range Tax rate
Upto Rs. 3,00,000 Nil
From Rs. 3,00,001 to Rs. 6,00,000 5%
From Rs. 6,00,001 to Rs.9,00,000 10%
From Rs. 9,00,001 to Rs. 12,00,000 15%
From Rs. 12,00,001 to Rs. 15,00,000 20%
Above Rs. 15,00,000 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:-
Range of Income
Rs. 50 Lakhs to Rs. 1 Crore Rs. 1 Crore to Rs. 2 Crores Exceeding Rs. 2 crores
10% 15% 25%
Note: The enhanced surcharge of 25% 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%.
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 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.
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:
(a) 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 percent of income-tax or Rs.12,500, whichever is less.

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(b) From Assessment Year 2024-25, a maximum rebate of Rs. 25,000 is allowed under section 87A, If
the total income of an resident individual, who is opting for the new tax scheme under Section
115BAC(1A), is up to Rs. 7,00,000.
(c) 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
(d) If an assessee has opted for new tax regime, the provisions of AMT shall not be applicable.
[As amended by Finance Act, 2023]

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Common questions

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For the Assessment Year 2024-25, the new tax regime sets the tax-free income threshold at Rs. 3,00,000 for individuals, while for super senior citizens it remains Rs. 5,00,000. Tax rates are then applied progressively with slabs changing slightly to provide relief for lower income brackets in the new regime compared to older structures. Super senior citizens enjoy a higher exemption limit in both scenarios .

Rebate provisions under section 87A effectively nullify the tax liability for resident individuals with net incomes up to Rs. 5,00,000 by deducting either the full tax amount or up to Rs. 12,500, whichever is less, for Assessment Year 2023-24. From 2024-25, a higher rebate threshold applies, allowing up to Rs. 25,000 if total income aligns with section 115BAC(1A) regulations .

Under the new tax regime applicable from Assessment Year 2024-25, individuals or funds opting for it are exempt from Alternate Minimum Tax (AMT). This contrasts with the older regime where AMT was levied at 18.5% on the adjusted total income of individuals, thus offering a simplified tax treatment for those under the new regime .

Surcharge is levied on income exceeding Rs. 50 Lakhs at 10%, Rs. 1 Crore at 15%, Rs. 2 Crores at 25%, and Rs. 5 Crores at 37%. However, for income under sections 111A, 112, 112A, and 115AD, the maximum surcharge is capped at 15%. Exemptions also apply to specified funds under section 10(4D) regarding securities income, where no surcharge is applied .

Marginal relief ensures that the tax payable does not increase disproportionately when crossing income thresholds. For example, if net income exceeds Rs. 50 lakhs but not Rs. 1 crore, surcharge and income-tax combined should not surpass the tax on exactly Rs. 50 lakhs by an amount exceeding the income's excess over Rs. 50 lakhs. This principle applies similarly at Rs. 1 crore, Rs. 2 crores, and Rs. 5 crores thresholds .

Health and Education Cess, applied at 4% on the sum of income tax and applicable surcharge, raises the total tax liability beyond basic and surcharge amounts. This cess is uniformly levied unless exempt conditions, like being a 'specified fund' under section 10(4D), apply .

Under section 87A, for the Assessment Year 2024-25, a resident with income up to Rs. 7,00,000 can claim a rebate up to Rs. 25,000 under the new tax regime of section 115BAC(1A). This rebate fully covers tax liability for incomes under this threshold. Additionally, marginal relief applies if the income slightly exceeds Rs. 7,00,000, ensuring tax payable rises gradually, not sharply .

High-income earners need to consider the benefits and drawbacks of the new tax regime's lower rates and limited deductions against the traditional regime. Opting out may benefit those leveraging extensive deductions and exemptions. Strategic planning involves evaluating which regime results in a lower tax burden, considering AMT applicability, surcharge rates, and rebate opportunities, thereby optimizing income retention .

The default status of the new tax regime for the Assessment Year 2024-25 implies taxpayers must actively opt-out to continue with the old regime. This may shift taxpayer behavior towards evaluating specific beneficial circumstances each regime offers, such as the absence of AMT or different exemption thresholds. Strategic decision-making will likely increase, focusing on calculating potential savings based on income structure and deductions .

During both Assessment Years 2023-24 and 2024-25, senior citizens enjoy an exemption up to Rs. 3,00,000, while non-senior citizen thresholds remain at Rs. 2,50,000. Super senior citizens have their exemption threshold set at Rs. 5,00,000 with progressive rates applicable beyond these thresholds similarly across all groups, reflecting favorable terms for elder persons .

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