Depending on your income level, income tax slabs establish how much tax you owe. Your total tax liability may be impacted by these tax brackets, which differ between nations and are subject to periodic changes. For efficient financial planning and to maximize your tax savings, you must comprehend income tax slabs.
Definition of Income Tax:
Income tax is a tax imposed on a person’s or company’s yearly earnings throughout a fiscal year. The Income Tax Act of 1961 establishes the guidelines for income tax assessment, collection, and computation, and it governs the Indian income tax system. According to the legislation, in order to record their income and, if eligible, get a tax refund, all taxpayers must file an Income Tax Return (ITR) by the appropriate deadline each year. On the official website of the Income Tax Department or through reputable third-party websites, one can file an income tax return both online and offline.
Who Is Required to Pay Income Tax?
Any individual earning more than ₹ 3 lakh annually in a financial year is required to pay income tax to the Government of India.
Understanding the Income Tax Slab System
Importance of Understanding Income Tax Slabs
Understanding the Income Tax Slab for FY 2024-25
Income Tax Slab Overview
Individual taxpayers must pay income tax based on the slab system into which they fall. Individuals may fall into a different tax bracket depending on their income. As a result, persons with higher incomes will have to pay more taxes. Generally, income tax slabs differ according to the taxpayer’s age, residential status, and other characteristics.
The New Tax Regime slabs and tax rates are shown in the following table. Tax rates for Individual (resident or non-resident) less than 60 years of age. New Tax Regime u/s 115BAC
| Income Tax Slab | Income Tax Rate |
| Up to ₹ 3,00,000 | NIL |
| ₹ 3,00,001 – ₹ 6,00,000 | 5% above ₹ 3,00,000 |
| ₹ 6,00,001 – ₹ 9,00,000 | ₹ 15,000 + 10% above ₹ 6,00,000 |
| ₹ 9,00,001 – ₹ 12,00,000 | ₹ 45,000 + 15% above ₹ 9,00,000 |
| ₹ 12,00,001 – ₹ 15,00,000 | ₹ 90,000 + 20% above ₹ 12,00,000 |
| Above ₹ 15,00,000 | ₹ 1,50,000 + 30% above ₹ 15,00,000 |
Individual tax rates for residents and non-residents aged 60 and above but under 80
| Income Tax Slab | Income Tax Rate |
| Up to ₹ 3,00,000 | NIL |
| ₹ 3,00,001 – ₹ 6,00,000 | 5% above ₹ 3,00,000 |
| ₹ 6,00,001 – ₹ 9,00,000 | ₹ 15,000 + 10% above ₹ 6,00,000 |
| ₹ 9,00,001 – ₹ 12,00,000 | ₹ 45,000 + 15% above ₹ 9,00,000 |
| ₹ 12,00,001 – ₹ 15,00,000 | ₹ 90,000 + 20% above ₹ 12,00,000 |
| Above ₹ 15,00,000 | ₹ 1,50,000 + 30% above ₹ 15,00,000 |
Tax rates for Individual (resident or non-resident) 80 years of age or more
| Income Tax Slab | Income Tax Rate |
| Up to ₹ 3,00,000 | NIL |
| ₹ 3,00,001 – ₹ 6,00,000 | 5% above ₹ 3,00,000 |
| ₹ 6,00,001 – ₹ 9,00,000 | ₹ 15,000 + 10% above ₹ 6,00,000 |
| ₹ 9,00,001 – ₹ 12,00,000 | ₹ 45,000 + 15% above ₹ 9,00,000 |
| ₹ 12,00,001 – ₹ 15,00,000 | ₹ 90,000 + 20% above ₹ 12,00,000 |
| Above ₹ 15,00,000 | ₹ 1,50,000 + 30% above ₹ 15,00,000 |
| Income Tax Slab | Income Tax Rate |
| Up to ₹ 3,00,000 | NIL |
| ₹ 3,00,001 – ₹ 6,00,000 | 5% above ₹ 3,00,000 |
| ₹ 6,00,001 – ₹ 9,00,000 | ₹ 15,000 + 10% above ₹ 6,00,000 |
| ₹ 9,00,001 – ₹ 12,00,000 | ₹ 45,000 + 15% above ₹ 9,00,000 |
| ₹ 12,00,001 – ₹ 15,00,000 | ₹ 90,000 + 20% above ₹ 12,00,000 |
| Above ₹ 15,00,000 | ₹ 1,50,000 + 30% above ₹ 15,00,000 |
Surcharge, Marginal Relief and Health & Education Cess
Surcharge: A surcharge is an extra fee applied to the amount of income tax determined by the appropriate rates for individuals whose income exceeds the designated thresholds.
7% of income over ₹1 crore that is subject to taxes up to ₹10 crore
12% of income over ₹10 crore is taxable.
10% If the company chooses to be taxable under Section 115BAA or Section 115BAB
What is Marginal Relief?
In situations where the surcharge payable above the increased income that renders the individual liable for the tax, a relief from the surcharge known as marginal relief is granted. The amount of the surcharge that must be paid cannot be more than ₹1 crore or ₹10 crore, respectively, in income.
What is health and education cess?
A 4% health and education cess must be paid on top of the income tax plus any applicable surcharge.
Frequently Asked Question (FAQs):
What is the income tax slab for fy 2024-25?
Ans: The following are the income tax slabs under the new tax slab: Rs 0 – Rs 3,00,000 – 0%, Rs 3,00,001 and Rs 7,00,000 – 5%, Rs 7,00,001 and Rs 10,00,000-10%, Rs 10,00,001 and Rs 12,00,000 – 15%, Rs 12,00,001 and Rs 15,00,000-20% and Rs 15,00,001 and above – 30%.
Which salary is tax free?
Under new regime, an individual below the age of 60 years is exempt up to Rs. 3 lakhs, senior citizens (60-80 years) are exempt up to Rs. 3 lakhs.
If my yearly income is less than Rs. 2.5 lakh, do I still need to file an income tax return?
You do not have to file an ITR if your annual income is less than Rs. 2.5 lakh; instead, you must file a “Nil Return” for your records, which you can use as employment documentation.
Will my income as an agriculturist be taxed?
There will be no taxes on any income derived from farming or similar endeavors. When determining the tax on any non-agricultural income you may have, it will be considered.
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