Income Tax Slab Rates for A.Y. 2024-25 | F.Y. 2023-24

Income-tax is a tax levied by the Government of India on the income of a person. The provisions governing the Income-tax are covered in the Income-tax Act, 1961, and rules made thereunder. The Income-tax Act comprises various chapters which include provisions relating to the determination of the residential status of a person in India, exemptions, computation of total income, deductions, determination of tax liability, filing of income tax return, the procedure for assessments, penalties, prosecutions, etc.

Income-tax liability of an assessee is calculated on basis of his ‘Total Income’. For tax calculation, a taxpayer’s total income shall be apportioned between normal income and special income. The normal income of a taxpayer is charged to tax as per applicable tax rates as prescribed every year under the Finance Act. Further, the Government has also introduced Alternate Tax Regimes which provide an option to the taxpayer to pay tax at reduced rates provided he forgoes certain exemptions or deductions.

An Individual or a HUF is not liable to pay tax if their normal income is up to the maximum exemption limit or basic exemption limit. The basic exemption limit and the tax rates in the case of an individual depend upon his age during the relevant previous year. The tax rates in the case of an individual or HUF have been enumerated below:

2.1 Tax rates for individuals (other than senior and super senior citizens) or HUF

2.2 Tax rates for senior citizens (i.e., an individual whose age is 60 years or more at any time during the previous year but less than 80 years on the last day of the previous year)

2.3 Tax rates for Super senior citizens (i.e., an individual whose age is 80 years or more at any time during the previous year)

Income-tax Act provides for the progressive tax system for individuals or HUFs. Under a progressive tax system, the tax rate increases as the total income increases. The general slab rates applicable in the case of an individual or HUF are 5%, 20%, and 30%. The highest slab rate of 30% applies on income exceeding Rs. 10,00,000.

The Finance Act, 2020 inserted a new Section 115BAC which provides for an alternative tax regime for individuals and HUF. This provision provides an altogether new tax slab wherein the tax rates have been significantly reduced. However, to avail the benefit of this tax regime, the assessee has to forgo specified exemptions and deductions.

In the Union Budget 2023, the maximum exemption limit and tax brackets in the new tax regime have been revised. Further, salaried employees are entitled for standard deduction even if opted for new regime.

If an Individual or HUF opts for the alternate tax regime, the income shall be taxable at the following rate:

For the old tax regime,  an individual, who is resident in India, is allowed a tax rebate under section 87A if the total income of such individual does not exceed Rs. 500,000.  The rebate is allowed to the extent of Rs. 12,500. Thus, if the total tax (excluding health & education cess) is less than or equal to Rs. 12,500, then the whole amount can be claimed as a rebate by a resident individual.

For the new tax regime, rebate under section 87A is available to resident individuals whose total income during the previous year does not exceed Rs. 7,00,000. Rebate is available to the extent of Rs. 25,000 only, and no rebate will be available if the total income exceeds Rs. 7,00,000.

Various entities are taxable under the status of AOP or BOI such as Joint Ventures, Trusts, Societies, etc. Therefore, the tax rates depend upon the type of entity. However, in general, an AOP or BOI is not liable to pay tax if its normal income is up to the maximum exemption limit or basic exemption limit.

An association of persons or body corporate having perpetual succession, and a common seal, with power to acquire and hold property, which can sue or be sued by the name by which it is known is an artificial juridical person. For example, a Bar Council is a juristic person covered by the expression artificial juridical person

The basic exemption limit and the tax rates in case of an AOP or BOI or AJP have been enumerated below:

7.1 Tax rates for Domestic Company

Income-tax Act allows a domestic company to choose from the following taxation regime subject to fulfillment of prescribed conditions.

7.2 Tax rates for Foreign Company

A foreign company is liable to pay tax at the flat rate of 40% of normal taxable income.

In general, co-operative societies are taxed at the slab rates and the highest slab rate is 30% which applies when income exceeds Rs. 20,000. However, the Finance Act, 2020, introduced an alternative tax regime under section 115BAD for resident co-operative societies. Further, a new tax regime under section 115BAE is introduced for new manufacturing co-operative societies set up on or after 01.04.2023, commencing manufacturing or production on or before 31.03.2024.

The tax rates in the case of co-operative societies have been enumerated below:

8.1 Normal Tax Rates

In general, a co-operative society is liable to pay tax as per the following rates:

8.2 Tax rate if opt for alternate tax regime under section 115BAD

If a co-operative society opts for the alternate tax regime under section 115BAD, the income shall be taxable at the rate of 22%. Further, a surcharge shall be levied at a flat rate of 10% of the income tax, irrespective of the income of such society. However, for availing the benefit of the alternate tax regime, it has to forego various exemptions or deductions.

8.3 Tax rate if opt for alternate tax regime under section 115BAE

If a co-operative society opts for the alternate tax regime under section 115BAE, the income shall be taxable at the following rates:

The tax calculated on the total income shall be further increased by the surcharge. The surcharge shall be levied at the rate of 10% of tax on total income. Further, the amount of income-tax and the surcharge, shall be further increased by health and education cess calculated at the rate of 4% of such income-tax and surcharge.

9. What is the tax rate for partnership firm (including LLP) or local authority?

A partnership firm (including LLP) or a local authority is liable to pay tax at the flat rate of 30% of normal taxable income.

10.1 In the case of an individual, HUF, AOP, BOI or AJP

In respect of an Individual, HUF, AOP**, BOI, and Artificial Juridical Person, the rate of surcharge for the Assessment Year 2024-25 shall be as under:

*The rate of surcharge in case of assessee’s opting for alternate tax regime under section 115BAC shall be 25% instead of 37% for A.Y. 2024-25

** The surcharge rates for AOP with all members as a company, cannot exceed 15%.

10.2 In case of a company

The rate of surcharge for the Assessment Year 2023-24 in case of a company shall be as under:

^†In respect of unexplained income as referred to in Section 115BBE, the rate of surcharge shall be 25%.

10.3 In case of any other assesse

* In the case of a resident co-operative society which opts for the alternative tax regime under section 115BAD or Section 115BAE, the surcharge is levied at a rate of 10% on the amount of income tax irrespective of the total income of such co-operative society.

Every person is liable to pay health and education cess at the rate of 4% on the amount of income-tax plus surcharge.