Current Income Tax Rates in India for FY 2023-24 (AY 2024-25)

If you are an individual taxpayer, a Hindu Undivided Family (HUF), a partnership firm, or a company, you need to know the income tax rates applicable for the financial year 2023-24 (assessment year 2024-25). The income tax rates are revised periodically by the government, usually during the annual budget. In this blog post, we will explain the income tax rates for various categories of taxpayers, the difference between the old and the new tax regimes, and the surcharge and cess applicable on the tax payable.

Income Tax Rates for Individuals, HUFs, and Artificial Juridical Persons

The income tax rates for individuals, HUFs, and artificial juridical persons depend on the age and the residential status of the taxpayer. There are three categories of individual taxpayers based on their age: below 60 years, 60 to 80 years (senior citizens), and above 80 years (super senior citizens). The residential status can be either resident or non-resident, depending on the number of days the taxpayer stays in India during the previous year.

The income tax rates for these categories of taxpayers are given in the table below:

Net Income Range	Individuals Below 60 Years and NRIs	Senior Citizens (60 to 80 Years)	Super Senior Citizens (Above 80 Years)
Up to Rs. 2.5 lakh	NIL	NIL	NIL
Rs. 2.5 lakh to Rs. 5 lakh	5%	5%	NIL
Rs. 5 lakh to Rs. 10 lakh	20%	20%	20%
Above Rs. 10 lakh	30%	30%	30%

Note: The income tax exemption limit is up to Rs. 2.5 lakh for individuals below 60 years and NRIs, up to Rs. 3 lakh for senior citizens, and up to Rs. 5 lakh for super senior citizens.

Income Tax Rates for Partnership Firms and Domestic Companies

The income tax rates for partnership firms and domestic companies are given in the table below:

Type of Taxpayer	Income Tax Rate
Partnership Firm	30%
Domestic Company	25% (if turnover in FY 2021-22 does not exceed Rs. 400 crore)
	30% (if turnover in FY 2021-22 exceeds Rs. 400 crore)

Note: The income tax rate for domestic companies is reduced from 30% to 25% if the company opts for the new tax regime under section 115BAA of the Income Tax Act, 1961. However, the company will have to forego certain deductions and exemptions if it chooses the new tax regime.

Income Tax Rates for Foreign Companies

The income tax rates for foreign companies are given in the table below:

Type of Income	Income Tax Rate
Royalty or fees for technical services	10%
Interest	20%
Dividend	20%
Any other income	40%

Note: The income tax rates for foreign companies are subject to the provisions of the Double Taxation Avoidance Agreement (DTAA) between India and the country of residence of the foreign company.

Surcharge and Cess on Income Tax

In addition to the income tax, the taxpayer has to pay a surcharge and a cess on the tax payable. The surcharge is levied on the amount of income tax at different rates depending on the total income of the taxpayer. The cess is levied at 4% of the total of income tax and surcharge.

The surcharge rates for various categories of taxpayers are given in the table below:

Range of Total Income	Surcharge Rate for Individuals, HUFs, and Artificial Juridical Persons	Surcharge Rate for Partnership Firms and Domestic Companies	Surcharge Rate for Foreign Companies
Up to Rs. 50 lakh	NIL	NIL	NIL
Rs. 50 lakh to Rs. 1 crore	10%	7%	2%
Rs. 1 crore to Rs. 2 crore	15%	12%	2%
Rs. 2 crore to Rs. 5 crore	25%	15%	2%
Above Rs. 5 crore	37%	15%	5%

Note: The surcharge rates for individuals, HUFs, and artificial juridical persons are reduced to 10%, 15%, and 22% respectively for dividend income or income chargeable to tax under sections 111A, 112, 112A, and 115AD (1) (b) of the Income Tax Act, 1961.

Old Tax Regime vs New Tax Regime

The government has introduced a new tax regime for individual taxpayers from FY 2020-21 onwards, which offers lower tax rates but with fewer deductions and exemptions. The taxpayer has the option to choose between the old tax regime and the new tax regime every year, depending on his or her income and tax-saving preferences.

The income tax slab rates under the new tax regime are as follows:

Net Income Range	Income Tax Rate
Up to Rs. 2.5 lakh	NIL
Rs. 2.5 lakh to Rs. 5 lakh	5%
Rs. 5 lakh to Rs. 7.5 lakh	10%
Rs. 7.5 lakh to Rs. 10 lakh	15%
Rs. 10 lakh to Rs. 12.5 lakh	20%
Rs. 12.5 lakh to Rs. 15 lakh	25%
Above Rs. 15 lakh	30%

Note: The income tax exemption limit is up to Rs. 2.5 lakh for all categories of individual taxpayers under the new tax regime.

The new tax regime is beneficial for those taxpayers who do not claim many deductions and exemptions under the old tax regime. However, the taxpayer has to give up the following deductions and exemptions if he or she opts for the new tax regime:

• Standard deduction of Rs. 50,000 for salaried taxpayers

• Deduction under section 80C for investments in provident fund, life insurance, etc. (up to Rs. 1.5 lakh)

• Deduction under section 80D for health insurance premium (up to Rs. 25,000)

• Deduction under section 80TTA for interest on savings account (up to Rs. 10,000)

• Deduction under section 80G for donations to charitable institutions

• Deduction under section 24 for interest on housing loan (up to Rs. 2 lakh)

• Exemption for house rent allowance (HRA)

• Exemption for leave travel allowance (LTA)

• Exemption for conveyance allowance

• Exemption for any other allowance as per section 10 (14)

The taxpayer has to compare the tax liability under both the regimes and choose the one that is more beneficial for him or her. The taxpayer can use the income tax calculator available on the Income Tax Department website to compare the tax liability under both the regimes.

Conclusion

The income tax rates in India for FY 2023-24 (AY 2024-25) vary for different categories of taxpayers and depend on the choice of the tax regime. The taxpayer has to be aware of the income tax rates, the surcharge and cess applicable, and the deductions and exemptions available under both the regimes. The taxpayer has to plan his or her income and tax-saving investments accordingly and file the income tax return before the due date.

I hope you find this blog post useful and informative. If you have any questions or feedback, please let me know. 😊