What are the Major Procedural Changes in Filing of Income Tax Return from FY 2022-23 to FY 2023-24?

1. For FY 2022-23, the default regime used to be the Old tax regime, if you wanted to go for the New tax regime, you were required to submit Form 10-IE. After the due date, you have to mandatorily file under the old regime only.
2. For FY 2023-24, the default regime changed to the new tax regime, now if you want to file the return under the old tax regime by claiming all the deductions, exemptions, and losses, then you have to file Form 10-IEA within the due date. After the due date, you have to mandatorily file under the new regime by giving up on most of the deductions and exemptions and all losses.

How to Calculate Income Tax from Income Tax Slabs?

Illustration 1: Rohit has a total taxable income of Rs 8,00,000. This income has been calculated by including income from all sources, such as salary, rental income, and interest income. Deductions under Section 80 have also been reduced. Rohit wants to know his tax dues as per the old regime for FY 2023-24 (AY 2024-2025).

Note:

Please note that Rohit is an individual taxpayer assessee having an income tax exemption of Rs 2,50,000. For other taxpayer assessees, i.e. senior citizens and super senior citizens, the Income-tax limit for availing the exemption would be Rs 3,00,000 & Rs 5,00,000, respectively.

Individuals with net taxable income less than or equal to Rs 5 lakh will be eligible for tax rebate u/s 87A under the old tax regime, i.e. tax liability will be NIL.

Important Points to note if you select the new tax regime:

• Please note that the tax rates in the New tax regime are the same for all categories of Individuals, i.e. Individuals, Senior citizens, and Super senior citizens.
• Individuals with net taxable income less than or equal to Rs 7 lakh will be eligible for tax rebate u/s 87A, i.e. tax liability will be NIL under the new regime.

What is a Surcharge and the Applicable Rates?

In case the income exceeds a certain threshold, the additional taxes are to be paid over and above existing tax rates. This is an additional tax on the High Income Earners.

Surcharge rates are as below:

10% of Income tax if total income > Rs.50 lakh and < Rs.1 crore,

15% of Income tax if total income > Rs.1 crore and < Rs.2 crore,

25% of Income tax if total income > Rs.2 crore and < Rs.5 crore,

37% of Income tax if total income > Rs.5 crore
*In Budget 2023, the highest surcharge rate of 37% has been reduced to 25% under the new tax regime. (applicable from 1st April 2023)

• Surcharge rates of 25% or 37% will not apply to the income from dividends and capital gains taxable under sections 111A (Short Term Capital Gain on Shares), 112A (Long Term Capital Gain on Shares), and 115AD (Tax on the income of Foreign Institutional Investors). Therefore, the highest surcharge rate on the tax payable for such incomes will be 15%.
• The surcharge rate for an Association of Persons (AOP) consisting entirely of companies will also be limited to 15%.

Additional Health and Education cess at the rate of 4% will be added to the income tax liability.

Consequences of Not Filing the Return Within the Due Date for AY 2024-25

With the failure to file the return within the due date for FY 2023-24, the taxpayer must opt for concessional rates in the New Tax regime but will have to forgo certain exemptions and deductions available in the existing old tax regime.

In total there are 70 deductions & exemptions that are not allowed, out of which the most commonly used are listed below:

Comparison of Income Tax Slabs under New Regime Before and After Budget

Only the Income tax slabs under the new regimes were revised in the Union Budget 2023.

Old Tax regime Vs New Tax regime? Which is better?

The new tax regime can largely benefit middle-class taxpayers who have a taxable income of up to Rs 15 lakh. The old regime is a better option for high-income earners.

The new income tax regime is beneficial for people who make low investments. As the new regime offers six lower-income tax slabs, anyone paying taxes without claiming tax deductions can benefit from paying a lower rate of tax under the new tax regime. For instance, the assessee having total income before deduction up to Rs 12 lakh will have higher tax liability under the old system if they have investments less than Rs. 3,12,500. Therefore, if you invest less in tax-saving schemes, go for the new regime.

That being said, if you already have in place a financial plan for wealth creation by making investments in tax-saving instruments; medical claims and life insurance; making payments of children’s tuition fees; payment of EMIs on education loan; buying a house with a home loan; and so on, the old regime helps you with higher tax deductions and lower tax outgo.

In light of the above and considering the new income tax regime, if taxpayers want to opt for the concessional tax rates, they may evaluate both regimes. Hence, it is advisable to do a comparative evaluation and analysis under both regimes and then choose the most beneficial one, as it may vary from person to person. Read a detailed breakdown on this topic here

When Can I Opt for Old vs New regime?

Income Tax Rate for Domestic Companies – FY 2023-24

*Please refer to the new sections for checking the applicability for the above concessional income tax rates.

NOTE:

• Additional Health and Education cess at the rate of 4 % will be added to the income tax liability in all cases.
• Surcharge applicable for companies is as below:
• 7% of Income tax where total income > Rs 1 crore,
• 12% of Income tax where total income > Rs.10 crore,
• 10% of income tax where domestic company opted for section 115BAA and 115BAB.

Income Tax Rate for Partnership Firm or LLP as per Old/New Regime

A partnership firm/ LLP is taxable at 30%.
NOTE:

• 12% Surcharge is levied on income is more than Rs 1 crore
• Health and Education Cess at the rate of 4% will be applicable
• No concessional rates are introduced for firms LLPs in the next tax regime

Income tax slab rates for FY 2019-20, FY 2020-21, FY 2021-22 and FY 2022-23

Income tax slab for Individual aged below 60 years & HUF

NOTE:

• Income tax exemption limit is up to Rs 2,50,000 for Individuals, HUF below 60 years aged and NRIs
• Surcharge and cess will be applicable as discussed above
• An additional 4% Health & education cess will be applicable on the tax and surcharge amount

Income tax slab for Individual aged above 60 years to 80 years

NOTE:

• Income tax exemption limit is up to Rs.3 lakh for senior citizens aged above 60 years but less than 80 years.
• Surcharge and cess will be applicable as discussed above

Income tax slab for Individual aged more than 80 years

NOTE:

• Income tax exemption limit is up to Rs 5 lakh for super senior citizen aged above 80 years.
• Surcharge and cess will be applicable as discussed above.

Income Tax Slab FY 2019-20, FY 2020-21, FY 2021-22 and FY 2022-23 for Domestic Companies

NOTE:

• In addition cess and surcharge are levied as follows:
  • Cess: 4% of corporate tax
  • Surcharge applicability:
    • Taxable income is more than 1 Crore but less than 10 Crores: 7%
    • Taxable income is more than 10 Crores: 12%

FY 2018-19: Income Tax Slab Rates                                             

Income tax slab for Individual aged below 60 years & HUF

NOTE:

• An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
• Surcharge applicability:
  • 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
  • 15% of income tax, where the total income exceeds Rs.1 crore.

Income tax slab for Individuals aged above 60 years to 80 years

NOTE:

• An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
• Surcharge applicability:
  • 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
  • 15% of income tax, where the total income exceeds Rs.1 crore.

Income tax slab for Individuals aged more than 80 years

NOTE:

• An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
• Surcharge applicability:
  • 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
  • 5% of income tax, where the total income exceeds Rs.1 crore

Income Tax Slab for Domestic Companies FY 2018-19

NOTE:

• In addition cess and surcharge is levied as follows:
  • Cess: 4% of corporate tax.
  • Surcharge applicability:
    • Taxable income is more than 1 Crore but less than 10 Crore: 7%
    • Taxable income is more than 10 Crore :12%

FY 2017-18: Income Tax Slab Rates 

Income tax slab for Individual below 60 years & HUF

NOTE:

• An additional 4% Health & education cess will be applicable on the tax amount calculated as above
• Surcharge applicability:
  • 10% of income tax, where total income exceeds Rs. 50 lakh up to Rs. 1 crore.
  • 15% of income tax, where the total income exceeds Rs. 1 crore.

Income tax slab for Individual aged above 60 years to 80 years

NOTE:

• An additional 4% Health & education cess will be applicable on the tax amount calculated as above
• Surcharge applicability:
  • 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore
  • 15% of income tax, where the total income exceeds Rs.1 crore.

Income tax slab for Individual aged more than 80 years

NOTE:

• An additional 4% Health & education cess will be applicable on the tax amount calculated as above
• Surcharge applicability:
  • 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore
  • 15% of income tax, where the total income exceeds Rs.1 crore.

Income Tax Slab for Domestic Companies FY 2017-18

NOTE:

• In addition cess and surcharge is levied as follows: Cess: 4% of corporate tax.
• Surcharge applicability:
  • Taxable income is more than 1 Crore but less than 10 Crore: 7%
  • Taxable income is more than 10 Crore: 12%

Frequently Asked Questions