Income Tax_Regime2023-24-KSMD Associates

Budget 2023 New Income Tax Regime- New Income Tax Slabs FY 2023-24 (AY 2024-25) & FY 2022-23 (AY 2023-24) – New & Old Regime Tax Rates for FY 2023-24 & FY 2022-23

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Budget 2023Income Tax

In India, income tax is levied on the income earned by individuals, Hindu Undivided Families (HUFs), firms, association of persons (AOPs), body of individuals (BOIs), companies, and any other person. The income tax rate varies based on the amount of taxable income and is divided into different tax slabs. The tax slabs and tax rates are revised by the government from time to time

Budget 2023 New Income Tax Regime

Income Range Income Tax Rate
Up to Rs. 3,00,000
Nil
Rs. 300,000 to Rs. 6,00,000
5% on income which exceeds Rs 3,00,000
Rs. 6,00,000 to Rs. 900,000
Rs 15,000 + 10% on income more than Rs 6,00,000
Rs. 9,00,000 to Rs. 12,00,000
Rs 45,000 + 15% on income more than Rs 9,00,000
Rs. 12,00,000 to Rs. 1500,000
Rs 90,000 + 20% on income more than Rs 12,00,000
Above Rs. 15,00,000
Rs 150,000 + 30% on income more than Rs 15,00,000

Income tax has classified three categories of “individual “taxpayers such as:

  • Individuals (aged less than of 60 years) including residents and non-residents
  • Resident Senior citizens (60 to 80 years of age)
  • Resident Super senior citizens (aged more than 80 years)

Income Tax Slab Rates for FY 2022-23 (AY 2023-24) – New Tax Regime & Old Tax Regime

Slab Resident Individuals & HUF < 60 years of age & NRIs Resident Individuals & HUF > 60 to < 80 years Resident Individuals & HUF > 80 years Before Budget 2023 (until 31st March 2023) After Budget 2023 (From 1st April 2023)
Old Tax Regime Slab Rates for FY 22-23 (AY 23-24)
New Tax Regime Slab Rates
₹0-₹2,50,000
NIL
NIL
NIL
NIL
NIL
₹2,50,000 -₹3,00,000
5%
NIL
NIL
5%
NIL
₹3,00,000-₹5,00,000
5%
5% (tax rebate u/s 87A is available)
NIL
5%
5%
₹5,00,000-₹6,00,000
20%
20%
20%
10%
5%
₹6,00,000-₹7,50,000
20%
20%
20%
10%
10%
₹7,50,000-₹9,00,000
20%
20%
20%
15%
10%
₹9,00,000-₹10,00,000
20%
20%
20%
15%
15%
₹10,00,000-₹12,00,000
30%
30%
30%
20%
15%
₹12,00,000-₹12,50,000
30%
30%
30%
20%
20%
₹12,50,000-₹15,00,000
30%
30%
30%
25%
20%
>₹15,00,000
30%
30%
30%
30%
30%

The taxpayer opting for New Tax regime of concessional rates will have to Not avail certain exemptions and deductions available in the existing old tax regime. In all there are 70 deductions & exemptions that are not allowed, out of the 70 which the most commonly used exemption are listed below:

The below list of new tax rate regime on Common Exemption & Deduction “ not allowed

  • Leave Travel Allowance (LTA)
  • Standard deduction on salary
  • Professional tax
  • House Rent Allowance (HRA)
  • Children education allowance
  • Conveyance allowance
  • Helper allowance
  • Relocation allowance
  • Daily expenses in the course of employment
  • Other special allowances [Section 10(14)]
  • Interest on housing loan (Section 24)
  • Deduction under Chapter VI-A deduction (80C,80D, 80E and so on) (Except Section 80CCD(2))

List of new Tax rate regime deductions “allowed”

  • Sport allowance for specially abled people
  • Conveyance allowance for expenditure incurred for travelling to work
  • Investment in Notified Pension Scheme under section 80CCD(2)
  • Depreciation u/s 32 of the Income-tax act except additional depreciation
  • Deduction for employment of new employees under section 80JJAA
  • Any allowance for travelling for employment or on transfer

Comparison between the exemptions & deductions available under the new and the old tax regime

Particulars Old Tax Regime New Tax regime (until 31st March 2023) New Tax Regime (From 1st April 2023)
Income level for rebate eligibility
₹ 5 lakhs
₹ 5 lakhs
₹ 7 lakhs
Standard Deduction
₹ 50,000
–
₹ 50,000
Effective Tax-Free Salary income
₹ 5.5 lakhs
₹ 5 lakhs
₹ 7.5 lakhs
Rebate u/s 87A
12,500
12,500
25,000
HRA Exemption
✓
X
X
Leave Travel Allowance (LTA)
✓
X
X
Other allowances including food allowance of Rs 50/meal subject to 2 meals a day
✓
X
X
Standard Deduction (Rs 50,000)
✓
X
✓
Entertainment Allowance Deduction and Professional Tax
✓
X
X
Perquisites for official purposes
✓
✓
✓
Interest on Home Loan u/s 24b on slef-occupied or vacant property
✓
X
X
Interest on Home Loan u/s 24b on let-out property
✓
✓
✓
Deduction u/s 80C (EPF|LIC|ELSS|PPF|FD|Children’s tuition fee etc)
✓
X
X
Employee’s (own) contribution to NPS
✓
X
X
Employer’s contribution to NPS
✓
✓
✓
Medical insurance premium – 80D
✓
X
X
Disabled Individual – 80U
✓
X
X
Interest on education loan – 80E
✓
X
X
Interest on Electric vehicle loan – 80EEB
✓
X
X
Donation to Political party/trust etc – 80G
✓
X
X
Savings Bank Interest u/s 80TTA and 80TTB
✓
X
X
Other Chapter VI-A deductions
✓
X
X
All contributions to Agniveer Corpus Fund – 80CCH
✓
Did not exist
✓
Deduction on Family Pension Income
✓
✓
✓
Gifts upto Rs 5,000
✓
✓
✓
Exemption on voluntary retirement 10(10C)
✓
✓
✓
Exemption on gratuity u/s 10(10)
✓
✓
✓
Exemption on Leave encashment u/s 10(10AA)
✓
✓
✓
Daily Allowance
✓
✓
✓
Conveyance Allowance
✓
✓
✓
Transport Allowance for a specially-abled person
✓
✓
✓

Note :-

  • Basic exemption limit for NRIs is of Rs 2.5 Lakh irrespective of age.
  • Additional 4 % rate will be added as Health and Education cess to the income tax liability in all cases.
  • Surcharge applicable as per tax rates below in all categories of Individuals, i.e Individuals & HUF
  1. 10% of Income tax if total income > Rs.50 lakh
  2. 15% of Income tax if total income > Rs.1 crore
  3. 25% of Income tax if total income > Rs.2 crore
  4. 37% of Income tax if total income > Rs.5 crore

Income tax rate for Partnership firm or LLP as per old/ new regime

A partnership firm/ LLP is taxable at 30%.

Note:-

  • Health and Education cess at the rate of 4 %
  • 12% Surcharge is levied on incomes above Rs 1 crore
  • There are no concessional rates introduced for firms / LLPs in nex tax regime

Domestic companies New Tax regime Slab rates – FY 2022-23.

Particulars Existing / Old regime Tax rates New Regime Tax rates
Company opts for section 115BAB (not covered in section 115BA and 115BAA) & is registered on or after October 1, 2019 and has commenced manufacturing on or before 31st March, 2023.
–
15%
Company opts for Section 115BAA , wherein the total income of a company has been calculated without claiming specified deductions, incentives, exemptions and additional depreciation
–
22%
Company opts for section 115BA registered on or after March 1, 2016 and engaged in manufacture of any article or thing and does not claim deduction as specified in the section clause.
–
25%
Turnover or gross receipt of the company is less than Rs. 400 crore in the previous year
25%
25%
Turnover or gross receipt of the company is less than Rs. 400 crore in the previous year 2018-19
30%
30%

*Please refer to the new sections for checking the applicability for above concessional income tax rates.

Note:-

  • Additional Health and Education cess at the rate of 4 % will be added to the income tax liability in all cases
  • Surcharge applicable for companies is as below
  1. 7% of Income tax where total income > Rs 1 crore
  2. 12% of Income tax where total income > Rs.10 crore
  3. 10% of income tax where domestic company opted for section 115BAA and 115BAB

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