Income Tax Brackets for AY 2024-25

Income Tax

The 2023 budget brings some big changes to how much tax you’ll pay. One important change is that if you earn less than Rs 3 lakh, you won’t have to pay any income tax. These changes start on April 1, 2023, and apply to money you make from April 1, 2023, to March 31, 2024. These new tax rules are for the 2023-24 financial year, which affects the 2024-25 tax season. Here’s a table showing the new tax rates for different types of earners:

Category Income Range Tax Rate
Individuals (Resident & Non-Resident) Up to Rs. 3,00,000 Nil
Rs. 3,00,001 to Rs. 6,00,000 5%
Rs. 6,00,001 to Rs. 9,00,000 10%
Rs. 9,00,001 to Rs. 12,00,000 15%
Rs. 12,00,001 to Rs. 15,00,000 20%
Above Rs. 15,00,000 30%
HUFs and AOPs Up to Rs. 2,50,000 Nil
Rs. 2,50,001 to Rs. 5,00,000 5%
Rs. 5,00,001 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%
Companies (Domestic) Turnover up to Rs. 400 crore in FY22-23* 25%
Companies (Foreign) Turnover up to Rs. 400 crore in FY22-23* 25%

In the tax rules for the financial year 2023-24, some important changes have been made to make them more appealing:

1. The new tax rules are now the default ones. This means that unless you specifically choose the old tax rules, your income will be taxed based on the new rules.

2. If your taxable income is up to Rs 7 lakh, you can get a tax rebate of Rs 25,000 under Section 87A. Previously, this rebate was available for incomes up to Rs 5 lakh.

3. The minimum income limit where you don’t have to pay any taxes has been increased to Rs 3 lakh from Rs 2.5 lakh in the new tax rules.

4. The new tax rules have reduced the number of tax brackets from six to five.

5. If you’re a salaried person or a pensioner, you can now deduct Rs 50,000 from your income under the new tax rules.

6. Family pensioners can also deduct Rs 15,000 from their income under the new tax rules.

7. The highest extra tax rate has been reduced from 37% to 25% in the new tax rules.

Here are various instances illustrating the application of these tax rates:

1. Individuals:
Let’s consider an individual with an annual income of INR 5 lakh during the fiscal year 2023-24 (assessment year 2024-25). The tax calculation would be as follows:
– Income up to INR 2 lakh: No tax
– Income from INR 2 lakh to INR 4 lakh: INR 10,000 (5% of INR 2 lakh)
– Income from INR 4 lakh to INR 5 lakh: INR 5,000 (10% of INR 1 lakh)
Therefore, the total tax liability amounts to INR 15,000. This qualifies for a rebate under Section 87A, resulting in no tax payment required.

2. Hindu Undivided Families (HUFs) and Association of Persons (AOPs):
Imagine a HUF with an annual income of INR 6 lakh in the financial year 2023-24 (assessment year 2024-25). The tax liability would be computed as follows:
– Income up to INR 2 lakh: No tax
– Income from INR 2 lakh to INR 4 lakh: INR 10,000 (5% of INR 2 lakh)
– Income from INR 4 lakh to INR 6 lakh: INR 20,000 (10% of INR 2 lakh)
Consequently, the total tax liability adds up to INR 30,000. Since the income exceeds 8 lakhs, a rebate under Section 87A is not applicable.

3. Companies:
Let’s take the example of a domestic company with a turnover of INR 200 crore for the fiscal year ending on March 31st, 2023, and a net profit of INR 30 crore during that period. The tax liability would be calculated as follows:
– Tax rate: 25%
Hence, the total tax liability amounts to INR 7.5 crore.

If You have any queries then connect with us at [email protected] or [email protected] & Contact us  & stay updated with our latest blogs & articles

Don't forget to share this article :-

Stay Updated With Our Blogs!

Explore more of our blogs to have better clarity and understanding
of the latest corporate & business updates.

Why People Choose Our Services ?

Free Legal Advice

We provide free of cost consultation and legal advice to our clients.

Tech Driven Platform

All our services are online no need you to travel from your place to get our services.

Grow your business

Experts Team

We are a team of more than 15+ professionals with 11 years of experience.

Transparent pricing

There are no hidden & extra charges* other than the quote/invoice we provide.

100 % Client Satisfaction

We aim that all our customers are fully satisfied with our services.

On-Time Delivery

We value your time and we promise all our services are delivered on time.

Why Trust legal Suvidha?

People Who loved our services and what they feel.

In this Journey of the past 10+ years, we had gained the trust of many startups, businesses, and professionals in India and stand with a 4.9/5 rating in google reviews.We register business online and save time & paperwork.

Reno K Subramaniam
Reno K Subramaniam
I have recently registered a Private Limited firm and was looking for a CA to take care of the filings, Startup India Certificate, and other formalities. I have received emails from legal Suvidha and a few others. I tried talking to them all. But, Mr. Mayank from Legal Suvidha was very impressive and was patient enough, prompt to answer all the queries. He has a very professional team and after the initial formalities, I started interacting with the team. It's not even 2 weeks but I really feel overwhelmed by their service and professionalism. I received my startup India certificate yesterday and my filings have been done promptly. The team at legal suvidha Ms. Nidhi, Ms. Priyanka, Ms. Koshika, and Ms. Saloni all show the same professionalism and are readily available to take care of the official filings and stuff. Overall a great experience till now and looking forward to a great journey!
pankaj tiwari
pankaj tiwari
Legal suvidha is a team of genuine and experienced professionals who give you best services according to your profile
Raman Krishnan
Raman Krishnan
Saloni from legalsuvidha has done a excellent job for filling and geting certificate of DPIIT. Thanks to legalsuvidha.
Prakaash Hari
Prakaash Hari
Team Legal Suvidha offers a brilliant service. There communication is quite clear and they execute the job meticulously. We are a startup private limited company and their advice is so critical in making my decision. Well done team. Keep it up. Prakaash Hari, Director, ipixela.
Priyanka Rudra
Priyanka Rudra
Dedicated team and fast response
Dr. Vishal Ghag
Dr. Vishal Ghag
Been using their services since 3 years now and I am absolutely happy with Legal Suvidha. They have been supportive, understanding and highly skilled at helping me with my business needs.

Our Partnerships & Collaborations

Contact us and grow your business

Legal Suvidha App

Now all Professional Services in a Single Click !

Now get all the services required for your business in a single app.

Subscribe to our newsletter & grow your business

Subscribe To Our Newsletter .

Sign up to receive email updates on new product announcements, special promotions, sales & more.