Income Tas is one of the type of tax which is charged to citizens of India levied direct by Government of India to their Citizens on their earned income during the specific financial year. In India the tax contributed on paid by citizens is biggest source of revenue or income of The Government. The Government of India utilized this revenue for giving various facilities to the citizens of India for example various subsidies to the farmers, education, healthcare and developing infrastructure.
In India there are two types of Tax
Direct Tax : The tax which is levied directly on the income earned and the income tax is specifically explained under the direct tax. There was different tax slabs in India as per the earned income.
There are two major types of direct tax
Individual Tax : This tax is majorly applied to an individual, HUF and any tax payer other than companies pay on the received income. the law prescribes the rate at which such income is taxable.
Corporate Tax : A specific rate of the corporate tax has been prescribed by the income tax of India. The tax which is paid by company is applied on companies taxable income.
| ncome tax slabs under new tax regime for FY 2023-24, FY 2024-25 | |
|---|---|
| Income tax slabs (Rs) | Income tax rate (%) |
| From 0 to 3,00,000 | 0 |
| From 3,00,001 to 6,00,000 | 5% |
| From 6,00,001 to 9,00,000 | 10% |
| From 9,00,001 to 12,00,000 | 15% |
| From 12,00,001 to 15,00,000 | 20% |
| From 15,00,001 and above | 30% |
Changes announced in the new tax regime in Budget 2023
Given below are the changes that were announced in the new tax regime in Budget 2023 for FY 2023-24:
- New income tax regime is the default tax regime. Thus, unless an individual specifically opts for the old tax regime, their incomes will be taxed at the new tax regime’s slabs and rates
- Rebate under Section 87A increased to taxable income of Rs 7 lakh (tax rebate of 25,000) from 5 lakh (tax rebate of Rs 12,500). This effectively means that any individual opting for the new tax regime with taxable income of up to Rs 7 lakh will not pay any taxes. Earlier, this tax rebate was available till taxable income of Rs 5 lakh
- Basic exemption limit hiked to Rs 3 lakh from Rs 2.5 lakh in the new tax regime
- The number of income tax slabs under the new tax regime reduced to five from six
- Standard deduction of Rs 50,000 introduced under the new tax regime for salaried and pensioners
- Family pensioners can also claim standard deduction of Rs 15,000 under the new tax regime
- Highest surcharge rate of 37% reduced to 25% under the new tax regime
There are various tax slabs in India and different tax rates are designed to different income range, due to income tax is directly depend on persons income. while increasing the persons income his tax rate also increases.
This type of taxation allows for a fair and progressive tax system in the country. The income tax slabs are revised after some period and mostly during the budget. This tax slabs vary to different groups of tax payers.
Major changes of Filling ITR from FY 2022-23 to FY 2023-24