Every financial year brings adjustments in tax policies, and the income tax slab for FY 2023-24 is no exception. Whether you are a salaried employee, self-employed, pensioner, or investor, understanding the IT tax slab for 2023-24 is crucial for effective financial planning. The Indian government offers two different tax regimes: the old regime with deductions and exemptions, and the new simplified regime without most of those benefits but with lower tax rates. Choosing the correct tax regime based on your income and deductions can help you minimize your tax liability and manage your finances efficiently.
Understanding the Tax Regimes
Old Tax Regime
The old tax regime allows taxpayers to claim various exemptions and deductions such as:
- House Rent Allowance (HRA)
- Standard Deduction of â¹50,000
- Section 80C investments (up to â¹1.5 lakh)
- Health insurance premiums under Section 80D
- Interest on housing loan under Section 24(b)
This regime is preferred by individuals who have significant investments and expenditures that qualify for deductions.
New Tax Regime
The new regime offers lower tax rates but eliminates most exemptions and deductions. It aims to simplify the tax filing process and is often more beneficial for taxpayers who do not have many claims under Sections 80C, 80D, etc. As of FY 2023-24, the new tax regime is also the default option unless the taxpayer opts for the old one explicitly.
Income Tax Slab Rates for FY 2023-24 (AY 2024-25)
New Tax Regime Slab
Under the new tax regime for FY 2023-24, the slab rates are as follows:
- Income up to â¹3,00,000 Nil
- â¹3,00,001 to â¹6,00,000 5%
- â¹6,00,001 to â¹9,00,000 10%
- â¹9,00,001 to â¹12,00,000 15%
- â¹12,00,001 to â¹15,00,000 20%
- Above â¹15,00,000 30%
A rebate under Section 87A is available for individuals with income up to â¹7 lakh under this regime, meaning no tax liability for those earning up to that limit.
Old Tax Regime Slab
The old regime has the following tax slab for individuals below 60 years of age:
- Income up to â¹2,50,000 Nil
- â¹2,50,001 to â¹5,00,000 5%
- â¹5,00,001 to â¹10,00,000 20%
- Above â¹10,00,000 30%
Senior citizens (aged 60 to 79 years) have a basic exemption limit of â¹3,00,000, and very senior citizens (80 years and above) enjoy a limit of â¹5,00,000.
Comparison Between Old and New Regime
Choosing between the two regimes depends on multiple factors, such as your salary structure, investment habits, and deductions. Here’s a basic comparison to help you decide:
- If you claim deductions exceeding â¹3 lakh annually, the old regime might be more beneficial.
- If you have minimal deductions or do not wish to invest in tax-saving instruments, the new regime offers a lower tax burden.
- The old regime is better suited for individuals with home loans, medical insurance premiums, and educational expenses.
Taxpayers can use income tax calculators provided by financial institutions or the Income Tax Department to simulate both options and make an informed decision.
Changes Introduced in Budget 2023
Higher Rebate Limit
Under the new regime, the rebate limit under Section 87A has been increased to â¹7 lakh, effectively making income up to that level tax-free. This is a key benefit for low and middle-income earners.
Standard Deduction Introduced
For the first time, a standard deduction of â¹50,000 is allowed under the new tax regime for salaried individuals and pensioners. This was previously available only under the old regime.
Default Tax Regime
The new regime has now been made the default for all taxpayers. However, individuals still have the option to opt for the old regime at the time of filing their income tax returns.
Leave Encashment Limit Raised
The limit for tax exemption on leave encashment for non-government employees has been increased from â¹3 lakh to â¹25 lakh under the new regime, making it more beneficial for retirees.
Surcharge and Cess
In both tax regimes, a health and education cess of 4% is applicable on the total tax payable. Surcharge is also levied on high-income individuals:
- 10% on income between â¹50 lakh and â¹1 crore
- 15% on income between â¹1 crore and â¹2 crore
- 25% on income between â¹2 crore and â¹5 crore
- 37% on income above â¹5 crore (restricted to 25% in the new regime)
The cap on surcharge in the new regime ensures the effective tax rate does not exceed 39%, providing relief to high-net-worth individuals.
How to File Taxes for FY 2023-24
Step-by-Step Filing Process
To file your income tax return for the financial year 2023-24, follow these steps:
- Gather all financial documents like Form 16, bank statements, investment proofs, and capital gains reports.
- Choose between the old and new tax regime based on your tax liability.
- Visit the official income tax e-filing portal and log in using your PAN credentials.
- Select the appropriate ITR form based on your income sources.
- Fill in the form, verify the details, and calculate tax liability.
- Pay any remaining tax dues and submit the form.
- Complete the verification process through Aadhaar OTP, net banking, or by sending a signed copy to the CPC office.
Important Deadlines
The due date for filing income tax returns for individuals (not subject to audit) is usually July 31st of the assessment year. For FY 2023-24, the deadline is July 31, 2024.
Tips for Efficient Tax Planning
- Start early to avoid last-minute mistakes and take full advantage of deductions under the old regime if applicable.
- Use tax-saving instruments like ELSS, PPF, NPS, and term insurance wisely.
- Maintain accurate records of all deductions, investments, and expenditures to support your claims.
- Re-evaluate your tax regime selection annually based on income changes and new provisions.
The IT tax slab for 2023-24 brings both opportunities and decisions for taxpayers. With the new regime becoming the default and offering competitive rates along with simplified structure, many will find it beneficial. However, the old regime still holds value for those who maximize deductions. By comparing both options and aligning them with your personal financial profile, you can make smarter tax decisions. Staying informed and proactive ensures you pay only what you owe and nothing more.