In the new income tax regime, the basic tax exemption limit has been increased from Rs 2.5 lakh to Rs 3 lakh. Income up to Rs 7 lakh is also tax free
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As per the Income Tax Act of India, all individuals, partnership firms, Hindu Unidivided Firm (HUF), limited liability partnerships (LLPs), and corporates have to pay income tax on their earnings. However, not all individuals have to pay tax as it depends on their tax slab. If one earns more than the minimum threshold limit (known as the basic exemption limit ), they become eligible to pay income tax.
There are many tax slabs, but based on the age group, income tax slabs for individuals are divided into three groups– individuals below the age of 60, individuals aged between 60 and 80, and individuals above the age of 80.
However, in the new tax regime, tax slabs are the same for every age category. It means senior citizens and super senior citizens will have no exemption limit benefit in the new tax regime.
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New income tax regime salient features
The basic exemption limit has been increased from Rs 2.5 lakh to Rs 3 lakh.
The government has introduced a standard deduction benefit in the new tax regime for salaried people and pensioners.
As per Budget 2023, tax rebates for individuals have been increased, and income up to Rs 7 lakh will be tax-free.
People with earnings between Rs 750,000 and Rs 900,000 will have to pay 10 per cent tax.
People with earnings between Rs 900,000 and Rs 1,000,000 will have to pay 10 per cent tax.
People earning between Rs 900,000 and 1,200,000 will have to pay 15 per cent tax.
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People earning between Rs 1,200,000 and Rs 1,500,000 will have to pay 20 per cent tax.
People with earnings more than Rs 1,500,000 will have to pay 30 per cent tax.
NRIs have the basic exemption limit of Rs 2.5 lakh, irrespective of age.
Four per cent additional health and education cess will be added to the income tax liability.
Surcharge is also different for different income groups:
10% of income tax if total income > Rs.50 lakh
15% of income tax if total income > Rs.1 crore
25% of income tax if total income > Rs.2 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 April 1, 2023)
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Income tax slabs under new regime:
Income Tax Slab Income Tax Rate
Up to Rs.3 lakh Nil
Rs.3 lakh -Rs.6 lakh 5%
Rs.6 lakh-Rs.9 lakh 10%
Rs.9 lakh-Rs.12 lakh 15%
Rs12 lakh-Rs.15 lakh 20%
Above Rs.15 lakh 30%
