These include New Tax Regime and Old Tax Regime. While filing tax in both the tax systems, different tax slabs have been given, according to which tax has to be filed.

Income tax return

While presenting the Union Budget 2023, Finance Minister Nirmala Sitharaman had announced several changes in income tax. Under these changes, the tax regime was also changed. Along with this, the income tax slabs were also changed. While announcing the change in the new tax regime, the Modi government has kept zero tax up to Rs 3 lakh.

ITR

After this, people will have to pay 5% tax on income of Rs 3-6 lakh annually. On the other hand, if someone’s income is 6-9 lakh rupees, then these people will have to pay 10% income tax. If someone’s annual income is Rs 9-12 lakh, then these people will have to pay 15% tax. After this, those people whose income is 12-15 lakh rupees, then those people will have to pay tax of 20%. Apart from this, people whose income is more than Rs 15 lakh will have to file 30% tax.

Old tax regime

On the other hand, if we talk about the old tax regime, then individual taxpayers below the age of 60 years will not have to pay any tax up to Rs 2.5 lakh. After this, these people will have to pay 5% tax on annual income of Rs 2.5 to 5 lakh. At the same time, 20 percent tax will have to be paid on the annual income of Rs 5-10 lakh. On the other hand, those whose income is more than Rs 10 lakh annually, they will have to pay tax of 30 percent.

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In the case of individuals, if someone’s income exceeds the minimum limit, then tax is levied according to the slab system. Indian Income Tax taxes individual taxpayers on the basis of a slab system. The slab system means that different tax rates are prescribed for different categories of income. This means that with the increase in the income of the taxpayer, the tax rates of the tax go on increasing.

Tax Regime

This type of taxation enables a progressive and fair tax system in the country. Such income tax slabs undergo changes during every budget. These slab rates are different for different categories of taxpayers. At the same time, there are currently two tax regimes in the country, according to which tax is collected. These are known as New Tax Regime and Old Tax Regime.

The Union Budget is going to be presented by the Finance Minister in a few days. On the other hand, if we look at the New Tax Regime and the Old Tax Regime for FY 2021-22, then a lot of difference will be seen. In these tax slabs, tax is charged at different rates for income up to Rs 10 lakh.

5 percent difference

In the New Tax Regime for FY 2021-22, tax has to be paid at the rate of 15 percent on annual income of Rs. 7.5 lakh to Rs. 10 lakh. Whereas it is not so in Old Tax Regime. In the Old Tax Regime, individual taxpayers below 60 years of age will have to pay 20 per cent tax on annual income between Rs 5 lakh and Rs 10 lakh. In such a situation, there is a difference of 5% in both the tax regimes for FY 2021-22 on an annual income of up to Rs 10 lakh.

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At the same time, many people are also saying that the income tax rates and slabs which were applicable in the assessment year 2022-23, can remain applicable in the new assessment year (AY 2023-24) as well.

Let us tell you that at present two tax systems are in force in the country. You can choose any of these according to your convenience. Now it has to be seen what changes will happen next year.

Income Tax Slabs and Rates 2023 (New Regime)

On annual income up to Rs 2.5 lakh: Zero On annual income
up to Rs 2.5-5 lakh: 5% On
annual income up to Rs 5-7.5 lakh: 10%
7.50-10 lakh Annual income up to Rs.15 lakhs: 15%
Annual income up to Rs.10-12.5 lakhs: 20%
Annual income up to Rs.12.5-15 lakhs: 25% Annual income up to Rs.15-20 lakhs
: 30%
20 lakhs On annual income above Rs.: 30%

Income Tax Slabs and Rates 2023 (Old Regime)

On annual income up to Rs 2.5 lakh: Zero On annual income
up to Rs 2.5-5 lakh: 5% On
annual income up to Rs 5-10 lakh: 20%
10-20 lakh Annual income up to Rs. 30%
Annual income above Rs. 20 lakhs: 30%

Changes in income tax rates and slabs expected in Budget 2023

Several tax experts and industry bodies have urged the government to revise income tax rates in certain slabs to provide relief to taxpayers. The tax rate for individuals has not been changed since FY 2017-18 (new tax regime in FY 2020-21). Experts are expecting that to give some relief to the employed taxpayers, the top tax rate of 30 per cent should be reduced to 25 per cent and the top tax limit should be increased from Rs 10 lakh to Rs 20 lakh.

Tapti Ghosh, partner, Deloitte India, expects from the budget:

Income Tax Rates (Old Regime)
Annual income up to Rs 2.5 lakh: Nil Annual income
up to Rs 2.5-5 lakh: 5% Annual income
up to Rs 5-10 lakh: 20%
Annual income up to Rs 10-20 lakh: 20%
Annual income above Rs 20 lakh: 25%

Income Tax Rates 2023 (New Regime)

Annual income up to Rs 2.5 lakh: Nil Annual income
up to Rs 2.5-5 lakh: 5% Annual income up to Rs 5-7.5 lakh
: 10%
Annual income up to Rs 7.50-10 lakh : 15%
Annual income up to Rs 10-12.5 lakhs: 20% Annual income
up to Rs 12.5-15 lakhs: 20% Annual income
up to Rs 15-20 lakhs: 20%
Annual income above Rs 20 lakhs: 25%

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