New Income Tax Slabs Changes 2023-24: Check all the updated tax slab rates

Union Budget 2023-24 LIVE:As the Union Budget 2023 was presented in the Indian Parliament on Wednesday, February 1 and Finance Minister Nirmala Sitharaman delivered her most-awaited Budget speech, all eyes were on the statements on taxes. The central, NDA-led government by Prime Minister Narendra Modi was widely expected to be giving the common person some tax relief this year, as its thelast budget before the 2024 Lok Sabha elections.

On one hand, the slowdown in the economy is affecting tax receipts and on the other hand, state spending is increasing. The industries, business sectors and market analysts are earnestly hoping that the NDA government's final budget before the Lok Sabha polls will be on employment generation and inclusive growth.

The Economic Survey noted in its chapter on India's inclusive growth, "Both official and unofficial sources confirm that employment levels have risen in the current financial year, as the Periodic Labour Force Survey (PLFS) shows that the urban unemployment rate for people aged 15 years and above declined from 9.8 per cent in the quarter ending September 2021 to 7.2 per cent a year later (quarter ending September 2022). This is accompanied by an improvement in the labour force participation rate (LFPR) as well, confirming the emergence of the economy out of the pandemic-induced slowdown early in 2022-23".

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Various types of tax slabs in India

Individual taxpayers in India pay income tax based on a slab system. A slab system means that different tax rates are prescribed for different income ranges. It means that tax rates continue to rise as the taxpayer's income rises. This type of taxation allows the country to have progressive and equitable tax systems. These income tax slabs are subject to change with each budget. These slab rates differ for different types of taxpayers.

Income tax has three categories of "individual" taxpayers, including:

1. Individuals (aged less than 60 years), including residents and non-residents
2. Resident Senior citizens (60 to 80 years of age)
3. Resident Super senior citizens (aged more than 80 years)

Income Tax

Income Tax islevied on a Hindu Undivided Family or an individual’s net taxable incomeduring a fiscal year that begins on April 1 and ends on March 31 of the following year. It iscalculated using an individual’s or a business’s net taxable income. The Government of India has set certain slab rates, i.e., higher and lower slab rates, for the convenience of its citizens.

Income Tax Slab rates announced in the Union Budget 2023-24

The personal Income Taxrebate limit increased to Rs 7 lakh, from earlier Rs 5 lakh in the new tax regime. People earning up to Rs 7 lakh, do not pay any income tax.

Finance Nirmala Sitharaman announced, "I introduced in 2020, the new personal income tax regime with 6 income slabs, starting from Rs 2.5 Lakhs. I propose to change the tax structure in this regime by reducing the number of slabs to 5 and increasing the tax exemption limit to Rs 3 Lakhs".

An individual with an income of ₹ 15 lakhswill have to pay ₹ 1.5 lakhs tax, down from ₹ 1.87 lakhs under the new tax structure.

The Finance minister also reduced the highest surcharge in the country to 25% from the current 37%.

Direct tax proposals

• Average processing time for ITRs reduced from 93 days to 16 days
• Thegovernment intends to roll out next-gen common IT Return forms and strengthen the grievance redressal mechanism

PreviousIncome Tax Slab rates

The previousincome tax slabs under the regular income tax regime were:

Up to Rs 2,50,000 income - NIL tax rate
Rs 2,50,001 - Rs 5,00,000 income - 5% tax rate
Rs 5,00,001 - Rs 10,00,000 income - 20% tax rate
Above Rs 10,00,000 income - 30% tax rate

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