Understanding income tax rates is essential for financial planning, be it for an individual, a Hindu Undivided Family (HUF), a partnership firm, or a company. This article aims to provide a comprehensive guide on the income tax rates applicable for the Assessment Years 2023-24 and 2024-25. It covers tax rates for various categories, such as individuals—both resident and non-resident, senior and super senior citizens, HUFs, and different types of firms and companies. Moreover, it delves into specifics like surcharge rates, Alternative Minimum Tax (AMT), and the Health and Education Cess. We also touch upon the new tax regime and how it impacts your tax calculations. By the end of this article, you’ll have a clearer understanding of your Income Tax Rates For FY 2022-23 & 2023-24 i.e. AY 2023-24 & 2024-25.
Income Tax Rates
1. In case of an Individual (resident or non-resident) or HUF or Association of Person or Body of Individual or any other artificial juridical person
| Individuals | ||
| (Other than resident senior and super senior citizen) | ||
| Net Income Range | Rate of Income-tax | |
| Assessment Year 2024-25 / Financial Year 2023-24 | Assessment Year 2023-24/Financial Year 2022-23 | |
| Up to Rs. 2,50,000 | – | – |
| Rs. 2,50,000 to Rs. 5,00,000 | 5% | 5% |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% | 20% |
| Above Rs. 10,00,000 | 30% | 30% |
| Resident Senior Citizen | ||
| (who is 60 years or more but less than 80 years at any time during the previous year) | ||
| Net Income Range | Rate of Income-tax | |
| Assessment Year 2024-25 | Assessment Year 2023-24 | |
| Up to Rs. 3,00,000 | – | – |
| Rs. 3,00,000 to Rs. 5,00,000 | 5% | 5% |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% | 20% |
| Above Rs. 10,00,000 | 30% | 30% |
| Resident Super Senior Citizen | ||
| (who is 80 years or more at any time during the previous year) | ||
| Net Income Range | Rate of Income-tax | |
| Assessment Year 2024-25 | Assessment Year 2023-24 | |
| Up to Rs. 5,00,000 | – | – |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% | 20% |
| Above Rs. 10,00,000 | 30% | 30% |
| Hindu Undivided Family (Including AOP, BOI and Artificial Juridical Person) | ||
| Net Income Range | Rate of Income-tax | |
| Assessment Year 2024-25 | Assessment Year 2023-24 | |
| Up to Rs. 2,50,000 | – | – |
| Rs. 2,50,000 to Rs. 5,00,000 | 5% | 5% |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% | 20% |
| Above Rs. 10,00,000 | 30% | 30% |
Add:
a. Surcharge : Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-
| Rate of Surcharge | |||||||
| Assessment Year 2024-25 | Assessment Year 2023-24 | ||||||
| Range of Income | Range of Income | ||||||
| Rs. 50 Lakhs to Rs. 1 Crore |
Rs. 1 Crore to Rs. 2 Crores |
Rs. 2 Crores to Rs. 5 Crores |
above Rs. 5 crore |
Rs. 50 Lakhs to Rs. 1 Crore |
Rs. 1 Crore to Rs. 2 Crores |
Rs. 2 Crores to Rs. 5 Crores |
above Rs. 5 crore |
| 10% | 15% | 25% | 37% | 10% | 15% | 25% | 37% |
Note:
(1) The enhanced surcharge of 25% & 37%, as the case may be, is not levied, on dividend income or income chargeable to tax under sections 111A, 112, 112A and 115AD(1)(b). Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.
(2) The surcharge rate for AOP with all members as a company, shall be capped at 15%.
(3) The surcharge rate is nil if the total income of a ‘specified fund’ as referred to in section 10(4D) includes any income in respect of securities as given under section 115AD(1)(a) (For Assessment Year 2024-25).
Marginal relief is available from surcharge in following manner-
i. in case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.
ii. in case where net income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
iii. in case where net income exceeds Rs. 2 crores but doesn’t exceed Rs. 5 crores, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crores by more than the amount of income that exceeds Rs. 2 crores.
iv. in case where net income exceeds Rs. 5 crores, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crores by more than the amount of income that exceeds Rs. 5 crores.
b. Health and Education Cess : Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.
Notes:
(1) The Health and Education Cess is nil if the total income of a ‘specified fund’ as referred to section 10(4D) includes any income in respect of securities as given under section 115AD(1)(a) (For Assessment Year 2024-25).
(2) A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500, whichever is less.
(3) If the total income of resident individual, who is opting for the new tax scheme under section 115BAC(1A), is up to Rs. 7,00,000, a higher rebate of Rs. 25,000 is allowed under section 87A.Such higher rebate is also subject to marginal relief (For Assessment Year 2024-25).
Alternate Minimum Tax (AMT)
An individual is liable to pay Alternate Minimum Tax where tax payable by him, on his total income computed as per normal provisions of the Act, is less than 18.5% of ‘adjusted total income’. In such a case the ‘adjusted total income’ is taken as income of such individual and he shall be liable to pay tax at the rate of 18.5% of such ‘adjusted total income’.
However, AMT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of an assessee other than a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange.
1.1. Special tax Rate for Individual and HUFs
New tax regime (also known as alternative tax regime) is optional for the Assessment Year 2023-24. An individual or HUF has to exercise the option under Section 115BAC(5) to avail its benefit.
However, for the Assessment Year 2024-25, the new tax regime is the default tax regime for the Individual or HUF. Further, the benefit of new tax regime has also extended to Association of Persons (AOP)/Body of Individuals (BOI) and Artificial Juridical Person (AJP) w.e.f. Assessment Year 2024-25. If one to opt-out from default new tax regime, he has to exercise the option under Section 115BAC(6).
The tax rates under the new tax regime are as under:
(a) For Assessment Year 2023-24:
| Net Income Range | Tax rate |
| Up to 2,50,000 | Nil |
| From 2,50,001 to 5,00,000 | 5% |
| From 5,00,001 to 7,50,000 | 10% |
| From 7,50,001 to 10,00,000 | 15% |
| From 10,00,001 to 12,50,000 | 20% |
| From 12,50,001 to 15,00,000 | 25% |
| Above Rs. 15,00,000 | 30% |
(b) For Assessment Year 2024-25:
| Net Income Range Upto Rs. 3,00,000 |
Tax rate Nil |
| From Rs. 3,00,001 to Rs. 6,00,000 | 5% |
| From Rs. 6,00,001 to Rs.9,00,000 | 10% |
| From Rs. 9,00,001 to Rs. 12,00,000 | 15% |
| From Rs. 12,00,001 to Rs. 15,00,000 | 20% |
| Above Rs. 15,00,000 | 30% |
Add:
a. Surcharge : Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-
| Range of Income | |||
| Rs. 50 Lakhs to Rs. 1 Crore | Rs. 1 Crore to Rs. 2 Crores |
Rs. 2 crores to Rs. 5 crores | Exceeding Rs. 5 Crores |
| 10% | 15% | 25% | 37% |
Note: The enhanced surcharge of 25% or 37% is not levied, on income by way of dividend or from income chargeable to tax under sections 111A, 112, 112A and 115AD(1)(b). Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%. Also, the surcharge rate for AOP with all members as a company, shall be capped at 15%.
However, enhanced surcharge rate of 37% is not applicable for assessees opting for tax regime under section 115BAC (from Assessment Year 2024-25).
Further, the surcharge rate is nil if the total income of a ‘specified fund’ as referred to in section 10(4D) includes any income in respect of securities as given under section 115AD(1)
(a) (For Assessment Year 2024-25).
However, marginal relief is available from surcharge in following manner-
i. in case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.
ii. in case where net income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
iii. in case where net income exceeds Rs. 2 crores, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crores by more than the amount of income that exceeds Rs. 2 crores.
iv. in case where net income exceeds Rs. 5 crores, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crores by more than the amount of income that exceeds Rs. 5 crores.
b. Health and Education Cess : Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge. However, The Health and Education Cess is nil if the total income of a ‘specified fund’ as referred to section 10(4D) includes any income in respect of securities as given under section 115AD(1)(a) (For Assessment Year 2024-25).
Notes:
(a) For Assessment Year 2023-24, a resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 percent of income-tax or Rs.12,500, whichever is less.
(b) From Assessment Year 2024-25, a maximum rebate of Rs. 25,000 is allowed under section 87A, if the total income of a resident individual, who is opting for the new tax scheme under Section 115BAC(1A), is up to Rs. 7,00,000.
(c) Further, if the total income of the resident individual opting section 115BAC(1A) exceeds Rs. 7,00,000 and the tax payable on such income exceeds the difference between the total income and Rs. 7,00,000, he can claim a rebate with marginal relief to the extent of the difference between the tax payable on such total income and the amount of income by which it exceeds Rs. 7,00,000
(d) If an assessee has opted for new tax regime, the provisions of AMT shall not be applicable.
2. Partnership Firm
For the Assessment Years 2023-24 & 2024-25, a partnership firm (including LLP) is taxable at 30%.
Add:
(a) Surcharge : The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).
(b) Health and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge
Alternate Minimum Tax (AMT)
A partnership firm is liable to pay Alternative Minimum Tax where tax payable by it, on total income computed as per normal provisions of the Act, is less than 18.5% of ‘adjusted total income’. In such a case the ‘adjusted total income’ is taken as the income of the firm and it shall be liable to pay tax at the rate of 18.5% of such ‘adjusted total income’.
However, AMT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of an assessee other than a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange.
3. Local Authority
For the Assessment Years 2023-24 & 2024-25, a local authority is taxable at 30%.
Add:
(a) Surcharge : The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).
(b) Health and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.
Alternate Minimum Tax (AMT)
A Local Authority is liable to pay Alternative Minimum Tax where tax payable by it, on total income computed as per normal provisions of the Act, is less than 18.5% of ‘adjusted total income’. In such a case the ‘adjusted total income’ is taken as the income of the firm and it shall be liable to pay tax at the rate of 18.5% of such ‘adjusted total income’.
However, AMT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange.
4. Domestic Company
Income-tax rates applicable in case of domestic companies for assessment years 2023-24 and 2024-25 are as follows:
| Domestic Company | ||
| Assessment Year 2024-25 | Assessment Year 2023-24 | |
| ♦ Where its total turnover or gross receipt during the previous year 2020-21 does not exceed Rs. 400 crore | NA | 25%
|
| ♦ Where its total turnover or gross receipt during the previous year 2021-22 does not exceed Rs. 400 crore | 25% | NA
|
| ♦ Any other domestic company | 30% | 30% |
Add:
(a) Surcharge : The amount of income-tax shall be increased by a surcharge at the rate of 7% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 12% of such tax, where total income exceeds ten crore rupees. The surcharge shall be subject to marginal relief, which shall be as under:
(i) Where income exceeds Rs. 1 crore but not exceeding Rs. 10 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
(ii) Where income exceeds Rs. 10 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore
(b) Health and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.
Minimum Alternate Tax (MAT)
A domestic company is liable to pay Minimum Alternate Tax where tax payable by it, on total income computed as per normal provisions of the Act, is less than 15% of ‘book profit’. In such a case the ‘book profit’ is taken as the income of the company and it shall be liable to pay tax at the rate of 15% of such ‘book profit’.
However, MAT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange.
4.1. Special Tax rates applicable to a domestic company
The special Income-tax rates applicable in case of domestic companies are as follows:
|
Domestic Company |
|
| ♦Where it opted for section 115BA | 25% |
| ♦ Where it opted for Section 115BAA | 22% |
| ♦ Where it opted for Section 115BAB | 15% |
Surcharge : The rate of surcharge in case of a company opting for taxability under Section 115BAA or Section 115BAB shall be flat 10% irrespective of amount of total income.
Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.
MAT : The domestic company who has opted for special taxation regime under Section 115BAA & 115BAB is exempted from provision of MAT. However, no exemption is available in case where section 115BA has been opted.
5. Foreign Company
Assessment Years 2023-24 and 2024-25
| Nature of Income | Tax Rate |
| Royalty received from Government or an Indian concern in pursuance of an agreement made with the Indian concern after March 31, 1961, but before April 1, 1976, or fees for rendering technical services in pursuance of an agreement made after February 29, 1964 but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government | 50% |
| Any other income | 40% |
Add:
(a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 2% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 5% of such tax, where total income exceeds ten crore rupees. However, the surcharge shall be subject to marginal relief, which shall be as under:
(i) Where income exceeds one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
(ii) Where income exceeds ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.
(b) Health and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.
Minimum Alternate Tax (MAT)
A foreign company is liable to pay Minimum Alternate Tax where tax payable by it, on total income computed as per normal provisions of the Act, is less than 15% of ‘book profit’. In such a case the ‘book profit’ is taken as the income of the company and it shall be liable to pay tax at the rate of 15% of such ‘book profit’.
However, the provisions of MAT do not apply in case of foreign companies if it does not have permanent establishment (PE) in India or opts for presumptive taxation scheme of Section 44B, Section 44BB, Section 44BBA or Section 44BBB.
6. Co-operative Society
Assessment Years 2023-24 and 2024-25
| Taxable income | Tax Rate |
| Up to Rs. 10,000 | 10% |
| Rs. 10,000 to Rs. 20,000 | 20% |
| Above Rs. 20,000 | 30% |
Add:
(a) (a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 7% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 12% of such tax, where total income exceeds ten crore rupees. However, the surcharge shall be subject to marginal relief, which shall be as under:
(i) Where income exceeds one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
(ii) Where income exceeds ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.
(b) Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.
Note:
(a) A co-op. society is liable to pay Alternate Minimum Tax where tax payable by it, on total income computed as per normal provisions of the Act, is less than 15% of ‘adjusted total income’. In such a case the ‘adjusted total income’ is taken as the income of co-op. society and it shall be liable to pay tax at the rate of 15% of such ‘adjusted total income’.
(b) If the assessee is a unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, the rate of AMT will be 9%.
6.1. Alternative Tax regime for Co-operative societies
Income-tax Act allows a co-operative society to choose from the following alternative taxation regime subject to fulfilment of prescribed conditions:
| Section | Conditions | Tax rate | ||||
| Section 115BAE |
|
15% (Income from manufacturing activities) | ||||
| Section
115BAD |
If co-operative society does not claim specified exemption, incentive or deduction | 22% | ||||
Add:
(a) Surcharge: The surcharge is levied at a rate of 10% on the amount of income-tax irrespective of the total income of such co-operative society.
(b) Health & Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of 4% of such income-tax and surcharge.
Note:
(a) If a co-operative society has exercised the option of Section 115BAD or Section 115BAE, the provisions of AMT shall not be applicable. Further, the provisions regarding computation and carry forward of AMT credit shall also be not applicable.
[As amended by Finance Act, 2023]
Attention is invited to the Articles Posted, –
@ https://taxguru.in/income-tax/income-tax-rates-financial-year-2023-24-ay-2024-25.html ; and @ https://taxguru.in/income-tax/income-tax-rates-financial-year-2024-25-ay-2023-24.html
Find the Revenue’s GUIDANCE NOTE since released through the ‘ITD’ Portal ,-
@ https://incometaxindia.gov.in/tutorials/78.calculation-of-taxable-salary-income.pdf
To the best of my understanding, that has clarified, beyond the pale of any doubt, any longer, the following three points:
1. Out of the chargeable income (TOTAL INCOME) in any given case, regardless of the income- range, no surcharge should be levied on income-tax on a sum of Rs 50 lakhs .
As such, in the first slab of Re.01 to rupee one crore, surcharge should be levied on income-tax on the balance of Rs.50 lakhs only, at the rate of 10% prescribed for that slab.
2. Surcharge should be levied at the respective slab rates, only in respect of the income covered within that slab.
For instance, if in a given case, in which the chargeable income (excluding income such as, LTCG for which a special/reduced rate of income-tax applies) is covered by the next higher slab of Rs 100,00,001 to Rs 2 crores, the surcharge rate to apply is 15% as prescribed for that slab.
3. Surcharge on Income such as LTCG taxable, on which income-tax is chargeable, – not at the normal slab rates but at a special reduced rate, then a separate computation should be made.
Should regard be had to the so mentioned points , it seems the question of allowing any marginal relief does not arise at all – AGREE !?
In the light of/consequent upon the clarificaory changes as mandated by the REVENUE , excess surcharge auto- calculated and collected by the CPC , in my firm conviction, has become refundable; that too for all the AYs 2020-21 to 2023-24 for which the faulted mechanism (the NEW SURCHARGE SCHEME) has been in force/operational !?!
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Please clarify the tax benefit to donor while giving Gift.