Rates of Income Tax
Detailed Income Tax Rates (Assessment Year 2023-24)
1. Old Tax Regime (with deductions and exemptions)
| Income Range (₹) | Tax Rate | Example Tax Calculation |
|---|---|---|
| Up to 2,50,000 | Nil | No tax for income ≤ ₹2,50,000 |
| 2,50,001 to 5,00,000 | 5% | Tax = 5% of (Income – 2,50,000) |
| 5,00,001 to 10,00,000 | 20% | Tax = 20% of (Income – 5,00,000) + ₹12,500 |
| Above 10,00,000 | 30% | Tax = 30% of (Income – 10,00,000) + ₹1,12,500 |
2. New Tax Regime (without most deductions)
| Income Range (₹) | Tax Rate | Example Tax Calculation |
|---|---|---|
| Up to 2,50,000 | Nil | No tax for income ≤ ₹2,50,000 |
| 2,50,001 to 5,00,000 | 5% | Tax = 5% of (Income – 2,50,000) |
| 5,00,001 to 7,50,000 | 10% | Tax = 10% of (Income – 5,00,000) + ₹12,500 |
| 7,50,001 to 10,00,000 | 15% | Tax = 15% of (Income – 7,50,000) + ₹37,500 |
| 10,00,001 to 12,50,000 | 20% | Tax = 20% of (Income – 10,00,000) + ₹75,000 |
| 12,50,001 to 15,00,000 | 25% | Tax = 25% of (Income – 12,50,000) + ₹1,25,000 |
| Above 15,00,000 | 30% | Tax = 30% of (Income – 15,00,000) + ₹1,87,500 |
Surcharge Rates
- 10% if income exceeds ₹50 lakh but is less than ₹1 crore.
- 15% if income exceeds ₹1 crore but is less than ₹2 crore.
- 25% if income exceeds ₹2 crore but is less than ₹5 crore.
- 37% if income exceeds ₹5 crore.
Cess
- Health and Education Cess: An additional 4% on the total income tax calculated after any applicable surcharges.
Deductions and Exemptions in the Old Regime
Taxpayers can claim various deductions under Section 80 of the Income Tax Act, including:
- Section 80C: Deductions up to ₹1,50,000 for investments in specified financial instruments (e.g., Life Insurance Premium, Employee Provident Fund (EPF), National Pension Scheme (NPS), Public Provident Fund (PPF), etc.).
- Section 80D: Deductions for health insurance premiums for self, spouse, children, and parents (up to ₹25,000, or ₹50,000 for senior citizens).
- Section 24(b): Deduction of up to ₹2,00,000 on interest paid on home loans.
- Section 80E: Deduction for interest on education loans.
Taxable Income Components
- Salary Income: Includes basic pay, allowances, and bonuses.
- Income from House Property: Rental income after deducting municipal taxes and interest on home loans.
- Capital Gains: Income from the sale of assets.
- Business/Professional Income: Income from business activities.
- Other Sources: Interest income, dividends, etc.
Filing Income Tax Returns (ITR)
- Individuals must file their income tax returns (ITR) based on their total taxable income. The due date for filing varies based on the type of taxpayer.
- The return must include all income sources and claim applicable deductions.
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