In the Union Budget 2023 speech by Finance Minister Nirmala Sitharaman on 1st February 2023, new tax regime 2023 has been introduced. Amendments in the tax slabs will take effect from 1st April, 2023 and will be applicable for FY 2023-24 and AY 2024-25.
Check the income tax slab for FY 2023-24 and AY 2024-25 in the post below.
Income Tax Slab FY 2023-2024 – Revised New Tax Regime
This tax regime will be applicable from 1st April 2023 and will be used for AY 2024-25. Also note that this is one of the two options to calculate income tax.
(Option 1 to calculate income tax)
Revised New Tax Regime – Default Regime from 1st Apr ‘23
(revised as per Union Budget 2023)
|Income Slab||Income Tax Rate|
|0 – ₹ 3,00,000||Nil|
|₹ 3,00,000 – ₹ 6,00,000||5%|
|₹ 6,00,000 -₹ 9,00,000||10%|
|₹ 9,00,00 – ₹ 12,00,000||15%|
|₹ 12,00,000 – ₹ 15,00,000||20%|
|Above ₹ 15,00,000||30%|
Before Union Budget 2023 was presented, in New Tax Regime, there was an increment of Rs 2.5 lakhs in each slab which is now Rs 3 lakh in each slab. Also, earlier, there was no tax till Rs 2.5 lakhs of annual income which is now Rs 3 lakhs annual. Also, tax rebate has been increased on annual income of Rs 7 lakhs as opposed to the previous of Rs 5 lakhs.
Income Tax Slab 2023-2024 – Old Tax Regime
Option 2 to calculate income tax
|Old Tax Regime |
(traditional method which is still applicable as second option)
|Income Slab||Income Tax Rate|
|0 – ₹ 2,50,000||NIL|
|₹ 2,50,000 – ₹ 5,00,000||5% (5% of the amount by which the total income exceeds Rs. 2,50,000)|
|₹ 5,00,000 – ₹ 10,00,000||20% (Rs. 12,500 plus 20% of the amount by which the total income exceeds Rs. 5,00,000)|
|Above ₹10,00,000||30% (Rs. 1,12,500 plus 30% of the amount by which the total income exceeds Rs.10,00,000)|
Important: Please note that there will still be two ways to compute income taxes – the traditional Old Tax Regime in which there are 4 tax slabs starting from income Rs 2.5 & above, and New Tax Regime in which there will be now 5 tax slabs (contrary to the previous 6 slabs) starting from income Rs 3 lakhs and above. Also note that in old tax regime, you get tax benefits as per Section 80C, HRA, etc. but when you opt the new tax regime, these benefits are scrapped and you give tax on the flat rates.
Important Points in Income Tax Slab 2023-24 – New Tax Regime 2023
- You don’t have to pay any income tax if your annual income is Rs 7 lakhs or less (if you opt for new tax regime) – earlier this was Rs 5 lakhs
- If you earn more than Rs 7 lakhs, you will not get tax rebate and will pay income tax as per the new tax regime
- From 1st April 2023, new tax regime will be the default tax regime – if you don’t opt for old tax regime where you can claim multiple deductions as per your investments in schemes, new tax regime will automatically be applicable to you
- Slabs have been reduced from 6 to 5 slabs now (in the new tax regime 2023)
Income Tax Slabs FY 2023-24: FAQs
In the Union Budget 2023, new tax regime 2023 has been introduced which is: Income up to Rs 3 lakhs – No Tax; Income above Rs 3 – 6 lakhs: 5% tax; Income above Rs 6 – 9 lakhs: 10% tax; Income above Rs 9 – 12 lakhs: 15% tax; Income above Rs 12 – 15 lakhs: 20% tax; and Income above Rs 15 lakhs: 30% tax. (This is for Individuals, HUFs and NRIs)
Yes. The old tax regime in which there is no income tax on income of up to Rs 2.5 lakhs, 5% on income of more than Rs 2.5 lakhs but less than Rs 5 lakhs is 5% and so on, is still applicable. In this regime, you can claim tax benefits as mentioned in Section 80C, HRA, etc.
There has been no change in the 80C limit in the Union Budget 2023.
Earlier, if the net income of an individual was up to Rs 5 lakhs, the government will refund the income tax taken from them in the form on income tax rebate. Now, this limit has been increased to Rs 7 lakhs. This means that when you file your ITR, if your income comes down to Rs 7 lakhs or less, you will get complete tax rebate and the government will refund the income tax deducted from your salary, if any.