It is crucial for taxpayers in India to understand the prevailing tax slabs and their implications. The tax slabs determine the rate at which income tax is charged on individual taxpayers based on their income levels. The Indian government periodically revises these slabs to reflect economic conditions and policy goals.
For AY 2024-25, the tax structure continues to follow a dual regime system: the Old Tax Regime, which allows for various deductions and exemptions, and the New Tax Regime, which offers lower tax rates but minimal exemptions and deductions. Taxpayers have the option to choose between these regimes based on their financial situations and planning strategies
The Finance Act 2023 has amended Section 115BAC, making the new tax regime the default for individuals, Hindu Undivided Families (HUF), Associations of Persons (AOP) (excluding cooperative societies), Bodies of Individuals (BOI), and Artificial Juridical Persons (AJP) starting from the Assessment Year 2024-25. However, eligible taxpayers can opt-out of the new tax regime and choose the old tax regime, which allows various deductions and exemptions.
Choosing the Tax Regime
- Non-Business Cases: Taxpayers can switch between regimes annually by selecting their preferred option directly in the Income Tax Return (ITR) form, provided it is filed by the due date under Section 139(1).
- Business and Profession Cases: Taxpayers with business or professional income who wish to opt out of the new tax regime must submit Form 10-IEA by the due date under Section 139(1). The option to switch back to the old tax regime can be exercised only once in a lifetime.
Tax Rates for Individuals (Resident or Non-Resident) Below 60 Years
Old Tax Regime
- Up to ₹2,50,000: Nil
- ₹2,50,001 – ₹5,00,000: 5% of income above ₹2,50,000
- ₹5,00,001 – ₹10,00,000: ₹12,500 + 20% of income above ₹5,00,000
- Above ₹10,00,000: ₹1,12,500 + 30% of income above ₹10,00,000
New Tax Regime (u/s 115BAC)
- Up to ₹3,00,000: Nil
- ₹3,00,001 – ₹6,00,000: 5% of income above ₹3,00,000
- ₹6,00,001 – ₹9,00,000: ₹15,000 + 10% of income above ₹6,00,000
- ₹9,00,001 – ₹12,00,000: ₹45,000 + 15% of income above ₹9,00,000
- ₹12,00,001 – ₹15,00,000: ₹90,000 + 20% of income above ₹12,00,000
- Above ₹15,00,000: ₹1,50,000 + 30% of income above ₹15,00,000
Tax Rates for Individuals (Resident or Non-Resident) 60 years or more but less than 80 years of age anytime during the previous year are as under:
Old Tax Regime
- Up to ₹3,00,000: Nil
- ₹3,00,001 – ₹5,00,000: 5% of income above ₹3,00,000
- ₹5,00,001 – ₹10,00,000: ₹10,000 + 20% of income above ₹5,00,000
- Above ₹10,00,000: ₹1,10,000 + 30% of income above ₹10,00,000
New Tax Regime (u/s 115BAC)
- Up to ₹3,00,000: Nil
- ₹3,00,001 – ₹6,00,000: 5% of income above ₹3,00,000
- ₹6,00,001 – ₹9,00,000: ₹15,000 + 10% of income above ₹6,00,000
- ₹9,00,001 – ₹12,00,000: ₹45,000 + 15% of income above ₹9,00,000
- ₹12,00,001 – ₹15,00,000: ₹90,000 + 20% of income above ₹12,00,000
- Above ₹15,00,000: ₹1,50,000 + 30% of income above ₹15,00,000
Tax Rates for Individuals (Resident or Non-Resident) Aged 80 Years and Above
Old Tax Regime
- Up to ₹5,00,000: Nil
- ₹5,00,001 – ₹10,00,000: 20% of income above ₹5,00,000
- Above ₹10,00,000: ₹1,00,000 + 30% of income above ₹10,00,000
New Tax Regime (u/s 115BAC)
- Up to ₹3,00,000: Nil
- ₹3,00,001 – ₹6,00,000: 5% of income above ₹3,00,000
- ₹6,00,001 – ₹9,00,000: ₹15,000 + 10% of income above ₹6,00,000
- ₹9,00,001 – ₹12,00,000: ₹45,000 + 15% of income above ₹9,00,000
- ₹12,00,001 – ₹15,00,000: ₹90,000 + 20% of income above ₹12,00,000
- Above ₹15,00,000: ₹1,50,000 + 30% of income above ₹15,00,000
Surcharge Rates on Income tax
| Total Income | Old Tax Regime | New Tax Regime |
| Up to ₹50 lakh | Nil | Nil |
| ₹50 lakh to ₹1 crore | 10% | 10% |
| ₹1 crore to ₹2 crore | 15% | 15% |
| ₹2 crore to ₹5 crore | 25% | 25% |
| Above ₹5 crore | 37% | 25% |
Note: Enhanced surcharge (25% & 37%) is not applicable on income taxed under sections 111A, 112, 112A, and dividend income. The maximum surcharge on these incomes is 15%, except for incomes taxable under sections 115A, 115AB, 115AC, 115ACA, and 115E.
Rebate Under Section 87A
| Total Income | Old Tax Regime | New Tax Regime |
| Up to ₹5 lakh | A tax rebate of up to ₹12,500 is available for resident individuals if their total income does not exceed ₹5,00,000 (not applicable to NRIs). | – |
| Up to ₹7 lakh | – | A tax rebate of up to ₹25,000 is available for resident individuals if their total income does not exceed ₹7,00,000 (not applicable to NRIs). |
Health and Education Cess
A 4% Health & Education Cess is applicable on the total income tax plus surcharge (if any) under both regimes.
Marginal Relief
Marginal relief ensures that the surcharge payable does not exceed the income that triggers the surcharge. For example, if the net income ranges between ₹50 lakh and ₹1 crore, the marginal relief ensures that the income tax plus surcharge does not exceed the tax on ₹50 lakh by more than the income exceeding ₹50 lakh. Similar calculations apply to higher income thresholds.
| Net Income Range | Marginal Relief |
| Exceeds ₹50 lakh but does not exceed ₹1 crore | Amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of ₹50 lakh by more than the amount of income that exceeds ₹50 lakh |
| Exceeds ₹1 crore but does not exceed ₹2 crore | Amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of ₹1 crore by more than the amount of income that exceeds ₹1 crore |
| Exceeds ₹2 crore but does not exceed ₹5 crore | Amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of ₹2 crore by more than the amount of income that exceeds ₹2 crore |
| Exceeds ₹5 crore | Amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of ₹5 crore by more than the amount of income that exceeds ₹5 crore |
