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Tax Rate under New Regime for Individual & HUF

Publish Date: April 29, 2023

Income Tax Rates under new Tax Regime for Individual & HUFs for FY 23-24

In India, changes in the income tax rates are bought down in the Union Budget of the respective year. The Budget session is generally carried out in the month of February every year. Generally these amendments are made applicable from the 1st day of the immediate next financial year. For example, Budget session of February 2023 are made applicable from FY 23-24 which starts from 1st April, 2023. In certain cases, the changes are bought into effect through notifications in the Official Gazette. During the Union Budget session of 22-23, certain changes were brought in on the income tax rates. The same, along with the tax rates applicable on various entities are mentioned below,

For Individuals and HUF Individual and HUF taxpayers must pay income tax based on the slab system into which they fall. From FY 22-23, this bracket of tax payers would have to pay taxes under the “New Regime” by default, unless the assessee chooses to pay taxes under the “Old Regime”.

Tax Rate  under New Tax Regime are as follows:

 Income Tax                                        Rate 
 (Rs.) (%) 
0 – 3,00,000 Nil
3,00,000 – 6,00,000 5% on income exceeding Rs. 3,00,000
 6,00,000 – 9,00,000 Rs. 15,000 + 10% on income exceeding Rs. 6,00,000
9,00,000 – 12,00,000 Rs. 45,000 + 15% on income exceeding Rs. 9,00,000
12,00,000 – 15,00,000 Rs. 90,000 + 20% on income exceeding Rs. 12,00,000
> 15,00,000  Rs. 1,50,000 + 30% on income exceeding Rs. 15,00,000

Under the new regime, tax payers will not able claim  some of the deductions and exemptions that are available in the old regime. Such deductions and exemptions are mentioned below :

1.  Leave Travel Allowance

2. Conveyance Allowance

3.  House Rent Allowance

4. Relocation Allowance

5. Children Education Allowance

6. Professional Tax

7. Helper Allowance

8. Interest on Housing Loan (Section 24)

9. Deduction u/s 80 [Except 80CCD(2) and 80JJAA

However there are certain deduction which are allowed under the New Tax Regime:

1.  Transport Allowance for specially abled

2. Conveyance Allowance for expenditure incurred for travelling to work

3. Investment in Notified Pension Scheme u/s 80CCD(2)

4. Deduction u/s 80JJAA

5. Depreciation u/s 32, other than additional depreciation

6. Standard Deduction on Salary

7. Any Allowance for travelling for employment or on transfer

Further, it is to be noted that the new tax regime will be the same for senior and super-senior citizens as well. Hence, the higher slab benefit available for people aged above 60 and 80 respectively is not available. Same slab is applicable for all kind of individuals.

Under the new regime, the rebate limit u/s 87 has been enhanced from Rs. 5,00,000 to Rs. 7,00,000. Therefore, there would be no tax on income upto Rs. 7,00,000.

Surcharge:

Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-

Range of Income Surcharge Rate on the amount of income tax
Less than Rs 50 lakhs Nil
More than Rs 50 lakhs ≤  Rs 1 Crore 10%
More than Rs 1 Crore ≤  Rs 2 Crore 15%
More than Rs 2 Crore ≤  Rs 5 Crore 25%
More than Rs 5 Crore 37%*

Note 1: The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax under sections 111A, 112A and 115AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.

Note 2:  From Assessment Year 2023-24 onwards the maximum rate of surcharge on tax payable on dividend income or capital gain referred to in Section 112, shall be 15%. o The surcharge rate for AOP with all members as a company, shall be capped at 15%.

Note 3: Health and Education Cess : Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in following manner:

 1. In case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

2. In case where net income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

3. In case where net income exceeds Rs. 2 crore but doesn’t exceed Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore

4. In case where net income exceeds Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more thanthe amount of income that exceeds Rs. 5 crore.

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