Income Tax Slab For Fy 2022 23 Ay 2023 24

Income Tax Slab for FY 2022-23 & AY 2023-24

With the recent budget release, new tax slabs have been announced for different taxpayers. Companies are taxed at a fixed rate however, individuals/AOP/HUFs/BOI are taxed at different slab rates. In the below article, let us understand the different tax slabs.

Income Tax Slab for Assessment Financial Year FY 2022-23 & AY 2023-24

Tax Rates for Individuals (resident or non-resident)/HUFs/Association of Person/Body of Individual, or any other artificial juridical person. Excludes Senior and Super-Senior citizens.

 

 

In addition to the tax slabs, a surcharge is levied which is as below –

 

What is an Income Tax Slab?

Income tax slabs in India determine how much tax an individual should pay in a financial year, according to their income. People with lower income levels have to pay no or low tax while people with higher income have to pay a higher percentage of taxes.

To know how much tax you should pay, the government has tax slabs according to brackets of income. The percentage of tax you would pay will depend on which tax slab you fall in.

Types of Taxable Income in India

Income tax is applicable on various sources of income. It is also applicable to various taxpayers like individuals, corporations, trusts, etc. Below are the different kinds of taxable income in India.

1. Income from Salary or Pension – Under this category, taxes are applied to allowances, basic salary, etc. The pension received after retirement is also taxed on the basis of the income tax slab. 
2. Income from Business – The profits from a business are also taxable as per the income tax slab applicable to businesses. The income from business is taxable after all the deductions are adjusted against the income. Corporations are subject to pay corporation tax while individuals in business will pay as per the income tax slabs.
3. Income from House Property – Rental income received from the house property is taxable as per the income tab slabs.
4. Income from winning races, lottery, etc. – There are different tax rules for income earned from races, lottery, etc. They are not taxed the same way as income tax slabs. 
5. Income Generated from Capital Gains – Capital gains from sale of assets such as real estate, gold, mutual fund, stocks, debentures, etc. are taxable. Capital gains can be classified into long-term or short-term based on the type of asset and the duration for which they were held. Capital gains taxes are separate from income tax slabs. 

How to Reduce the Taxable Income?

1. Under Section 80C, use your 1.5 lakhs limit – Investments in the below type of investments will get you a tax deduction of up to Rs. 1.5 lakhs. Make sure you use that to save the taxes you pay.
   1. Tax-saving Fixed Deposits – Investing in 5-year tax-saving Fixed Deposits can get you a tax deduction of up to Rs. 1.5 lakhs. The interest rate on these FDs is around 7-8%, but the interest earned is taxable.
   2. Public Provident Fund – Public Provident Funds are a saving scheme with a tenure of 15 years. They are available at most post offices and banks. The current rate of interest on PPF is 8%. The interest on PPF is non-taxable.
   3. ELSS Funds – These are mutual funds that invest a minimum of 80% in equity. They have a lock-in period of 3 years and are subject to long term capital gains tax.
   4. National Saving Certificate – NSC has a tenure of 5 years and the interest rate can be up to 8%. 
   5. Life Insurance Premiums – Premiums for insurance policies like ULIP, term insurance, and endowment policies are tax deductible up to Rs. 1.5 lakh.
   6. National Pension Scheme – Contribution towards NPS will be eligible for deduction under Section 80CCD.
   7. Home Loan Repayment – Repayment of only the principal amount of a loan is eligible for tax deduction up to Rs. 1.5 lakhs.
   8. Payment of tuition fees – The tuition fee paid for children is also eligible for tax deduction up to Rs. 1.5 lakhs.
   9. Senior Citizens Savings Scheme – Investment in SCSS is also eligible for tax deduction up to Rs. 1.5 lakhs. The tenure is 5 lakhs and the minimum age should be 60 years.
   10. Sukanya Samriddhi Yojana – This scheme has a tenure of 21 years. Parents with girl children under the age of 10 can invest in this scheme. The interest rate is at 8.5% and the interest from this scheme is non-taxable.
2. Contribute to the National Pension System – Through NPS, you can invest in both debt and equity pension funds. Withdrawal from the fund is allowed at the age of 60. 
3. Health Insurance Premiums – Investment in health insurance under Section 80D is eligible for tax deduction. A deduction of Rs. 50,000 is available for senior citizens and Rs. 25,000 for others.
4. Deduction on the rent paid – By showing the rent receipt, you can claim the deduction on House Rent Allowance.
5. Deduction on the Interest Paid on Home Loan – Interest paid on home loan up to Rs. 2 lakhs are eligible for tax deduction.
6. Charity – Money paid towards charity is eligible for a tax deduction. The charity should be made to charitable institutions with an 80G certificate.

Also Read: How to Calculate Your Income Tax? 

FAQ of Income Tax Slab for FY 2022-23 _ AY 2023-24

1:Do I need to file an Income Tax Return (ITR) if my annual income is below Rs 2.5 lakh?

It is mandatory to file your ITR only if your total annual income exceeds the maximum exempt amount of Rs 2.5 lakh.

2:Are the income tax slabs for AY 2023-24 in the case of the new tax regime the same for all taxpayers irrespective of age?

Yes, the new income tax slabs for AY 2023-24 (FY 2022-23) under the new tax regime does not change based on the age of the taxpayer. So, the limit of maximum tax-exempt income is Rs 2.5 lakh regardless of the individual taxpayer's age.