Income tax rates in India are announced annually by the Minister of Finance. Currently, there are two different income tax regimes. Under the new system, tax incentives are not available. Taxpayers can enjoy tax incentives under the old system.
This year, Finance Minister Nirmala Sitharaman announced the Union Budget for 2022 on February 1, 2022. In the latest budget, no changes were proposed to the existing income tax schedule and rates.
NOTE: You can now file your taxes through the new Income Tax Portal. The new portal has many features designed to simplify the tax filing process.
What is the Income Tax Slab?
Income tax flats are defined as individual taxpayers who must pay income tax according to the flat system to which they belong. Depending on an individual’s income, he may fall under different tax categories. Therefore, people with higher incomes pay higher taxes. The flat system was introduced to maintain a fair taxation system in the country. Tablets keep changing with every budget announcement.
Income tax segment remains unchanged
There have been no changes to personal income tax returns as Finance Minister Nirmala Sitharaman has made no announcements during the 2022 federal budget. However, seniors aged 75 and over are exempt from income tax if their sole source of income is a pension. ,
New Income Tax Forms for FY 2022-2023 (2023-2024)
The various tables of revised income tax schedules and tax rates for the financial year 2022 to 2023 and the year of assessment 2023 to 2024 are as follows:
New Regime Income Tax Slab Rates for Individual
| Income Tax Slab | Tax Rate |
| Up to Rs.2.5 lakh | Nil |
| Above Rs.2.50 – Rs.5 lakh | 5% of the total income that is more than Rs.2.5 lakh |
| Above Rs.5 lakh – Rs.7.50 lakh | 10% of the total income that is more than Rs.5 lakh + Rs.12,500 |
| Above Rs.7.50 lakh – Rs.10 lakh | 15% of the total income that is more than Rs.7.5 lakh + Rs.37,500 |
| Above Rs.10 lakh – Rs.12.50 lakh | 20% of the total income that is more than Rs.10 lakh + Rs.75,000 |
| Above Rs.12.50 – Rs.15 lakh | 25% of the total income that is more than Rs.12.5 lakh + Rs.1,25,000 |
| Above Rs.15 lakh | 30% of the total income that is more than Rs.15 lakh + Rs.1,87,500 |
Note: New income tax rates are optional
Things to keep in mind before choosing a new tax form
Here are a few things you should keep in mind before choosing a new tax form:
You can exercise this option on or before the previous year if you do not have any business income as an individual or as a member of a Hindu Unaffiliated Family (HUF).
As a taxpayer, once you have selected the next tax bracket as your choice, you cannot change it during the year. If you withdraw your election for the next tax regime and revert to the old tax regime, you can elect the new tax regime again for the fiscal year.
An illustration of how income tax for the financial year 2022-23 will be calculated under the new regime (alternative) is given below:
Income Tax Schedule and Rates under the Old Regime for FY 2022-23
Below are the three tables for the Alternative Income Tax section:
| Total Income (Gross) | Rs.12 lakh |
| Deductions (80C, 80CCD) | – |
| HRA | – |
| Travel and Medical Allowance | – |
| Income that is Taxable | Rs.12 lakh |
| Up to Rs.2.5 lakh | – |
| Above Rs.2.50 – Rs.5 lakh | Rs.12,500 |
| Above Rs.5 lakh – Rs.7.50 lakh | Rs.25,000 |
| Above Rs.7.50 – Rs.10 lakh | Rs.37,500 |
| Above Rs.10 lakh – Rs.12.50 lakh | Rs.40,000 |
| Total Tax that must be Paid | Rs.1,15,000 |
Income Tax Returns for Persons Under 60
| Income Tax slab | Tax Rate |
| Up to Rs.2.5 lakh | Nil |
| Above Rs.2.50 lakh – Rs.5.00 lakh | 5% of the total income that is more than Rs.2.5 lakh + 4% cess |
| Above Rs.5 lakh – Rs.10 lakh | 20% of the total income that is more than Rs.5 lakh + Rs.12,500 + 4% cess |
| Above Rs.10 lakh | 30% of the total income that is more than Rs.10 lakh + Rs.1,12,500 + 4% cess |
Individuals earning less than Rs 5 lakh are eligible for tax deduction under Section 87A
Example of how income tax was calculated for 3 people (A, B and C) under the old system
| Components | A | B | C |
| Annual Salary (Rs.) | 5,00,000 | 10,00,000 | 15,00,000 |
| Standard Deduction (Rs.) | 50,000 | 50,000 | 50,000 |
| Tax deductions under Section 80C of the Income Tax Act (Rs.) | 70,000 | 1,50,000 | 1,50,000 |
| House Rent Allowance deductions | 82,000 | 90,000 | 1,40,000 |
| Gross total income after deductions (Rs.) | 2,88,000 | 7,00,000 | 11,50,000 |
| Computation of tax on the gross total income | |||
| Up to Rs.2.5 lakh (Rs.) | Nil | Nil | Nil |
| From Rs.2,50,001 to Rs.5 lakh (Rs.) | 1,900 | 12,500 | 12,500 |
| From Rs,5,00,001 to Rs.10 lakh (Rs.) | 40,000 | 1,00,000 | |
| Above Rs.10 lakh (Rs.) | 45,000 | ||
| Total Tax (Rs.) | 1,900 | 52,500 | 1,57,500 |
| Deductions under Section 87A (Rs.) | 1,900 | Nil | Nil |
| Additions of cess (Rs.) | Nil | 2,100 | 6,300 |
| Total tax that is payable (Rs.) (Total Tax + cess – Deductions under Section 87A) | Nil | 54,600 | 1,63,800 |
Income Tax Flat Panel for Ages 60-80 (Seniors)
Below is an example of how to calculate income tax for 3 people (A, B, C).
| Income Tax slabs | Tax Rate |
| Up to Rs.3 lakh | Nil |
| Above Rs.3.00 lakh – Rs.5.00 lakh | 5% of the total income that is more than Rs.3 lakh + 4% cess |
| Above Rs.5.00 lakh – Rs.10 lakh | 20% of the total income that is more than Rs.5 lakh + Rs.10,500 + 4% cess |
| Above Rs.10 lakh | 30% of the total income that is more than Rs.10 lakh + Rs.1,10,000 + 4% cess |
Income Tax Form for People Over 80 (Super Seniors)
| Income Tax slabs | Tax Rate |
| Up to Rs.5 lakh | Nil |
| Above Rs.5 lakh – Rs.10 lakh | 20% of the total income that is more than Rs.5 lakh + 4% cess |
| Above Rs.10 lakh | 30% of the total income that is more than Rs.10 lakh + Rs.1,00,000 + 4% cess |
Below is an example of how to calculate income tax for 3 people (A, B, C).
| Components | A | B | C |
| Annual Salary (Rs.) | 5,00,000 | 10,00,000 | 15,00,000 |
| Standard deduction (Rs.) | 50,000 | 50,000 | 50,000 |
| Tax deductions under Section 80C of the Income Tax Act (Rs.) | 70,000 | 1,50,000 | 1,50,000 |
| House Rent Allowance deductions | 82,000 | 90,000 | 1,40,000 |
| Gross total income after deductions (Rs.) | 2,88,000 | 7,00,000 | 11,50,000 |
| Computation of tax on the gross total income | |||
| Up to Rs.5 lakh (Rs.) | Nil | Nil | Nil |
| From Rs,5,00,001 to Rs.10 lakh (Rs.) | 40,000 | 1,00,000 | |
| Above Rs.10 lakh (Rs.) | 45,000 | ||
| Total Tax (Rs.) | Nil | 40,000 | 1,45,000 |
| Deductions under Section 87A (Rs.) | Nil | Nil | Nil |
| Additions of cess (Rs.) | Nil | 1,600 | 5,800 |
| Total tax that is payable (Rs.) | Nil | 41,600 | 1,50,800 |
For domestic companies, the tax rate depends on the turnover as stated below
| Turnover | Tax Rate |
| Gross turnover can be a maximum of Rs.250 crore for the previous year | 25% |
| Gross turnover is more than Rs.250 for the previous year | 30% |
In addition to the above rates, additional surcharges and duties are imposed. Additional fees and surcharge details are as follows:
Customs duty: 4% of corporate tax
Surcharge: A surcharge of 7% will be levied if the taxable income exceeds Rs. 1 million but falls below Rs. 10,000. A surcharge of 12% is levied if the taxable income exceeds Rs 10 crore.
Non-Resident Indians: For NRIs, regardless of age, the exemption limit is up to Rs 2.5 lakh.
very important point
In addition to the duty of 4%, there is a surcharge of 10% if your net income exceeds Rs 5 lakhs but less than Rs 10 lakhs. A surcharge of 15% will be levied if the net amount exceeds INR 1 crore.
Compared with last year’s budget, the tax was increased from 3% to 4%.
Additional tax rates applicable to income tax
When the income of the assessed person exceeds the limit set by the income tax department, an additional tax will be levied on the income tax amount. Additional rates are as follows:
2022-23 Assessment Year
| Range of Income | Applicable Rate of Surcharge |
| Rs.50 lakhs to Rs.1 crore | 10% |
| Rs.1 crore to Rs.2 crore | 15% |
| Rs.2 crore to Rs.5 crore | 25% |
| Rs.5 crore to Rs.10 crore | 37% |
| More than Rs.10 crore | 37% |
2023-24 Assessment Year
| Range of Income | Applicable Rate of Surcharge |
| Rs.50 lakhs to Rs.1 crore | 10% |
| Rs.1 crore to Rs.2 crore | 15% |
| Rs.2 crore to Rs.5 crore | 25% |
| Rs.5 crore to Rs.10 crore | 37% |
| More than Rs.10 crore | 37% |
Time to choose Between the New and Old Regime
| Type of income | When to choose between the old and new regimes |
| Salary income or any other type of income that triggers TDS | An employee can opt for the new tax regime at the beginning of financial year. However, once chosen they cannot revert back to the old regime and can only change the option of selecting the tax regime at the beginning of the new financial year |
| Income from Profession and Business | In case of income from profession and business, the option to choose between the tax regimes is available only once. |
New Tax Slab Rates for Domestic Companies
| Type | Old regime Tax rates | New Regime Tax rates |
| Company chooses section 115BAB and is registered on or after 1 October 2019 and has commenced manufacturing on or before 31 March, 2023. | – | 15% |
| Company chooses Section 115BAA, wherein the total income of a company has been calculated where specified deductions, incentives, exemptions and additional depreciation have not been claimed | – | 22% |
| Company chooses section 115BA registered on or after 1 March 2016 and are engaged in manufacture of any item and no deduction claim as specified in the section clause has been made. | – | 25% |
| If a company’s turnover is less than Rs. 400 crore in the previous year 2018-19 | 25% | 25% |
| Any other domestic company | 30% | 30% |
Income Tax Form FAQs
- Do I need to file an income tax return if my annual income is less than Rs 2.5 lakh?
If your annual income is less than Rs 2.5 lakh, you do not need to file ITR but you should file “Non-return” just for the record as in many cases you can produce them as proof of your employment. For example, you can provide your ITR when applying for a loan or passport.
- How is taxpayer income classified?
According to Section 14 of the Income Tax Act, the income of a taxpayer is classified into 5 different income categories such as salary personal, capital gains, professional or business gains/profits, income from real estate, income from other sources.
- Is the family pension included in wage income when taxed?
No, family pensions are not taxed under wage income, but as “income from other sources”.
- Who can claim a refund under Section 87A?
Any Indian resident with an annual gross income of less than Rs 5 lakh can claim a tax refund under Section 87A. The maximum rebate available under 87A is Rs 12,500.
- If I am a farmer, will my income be taxed?
Any income derived from farming or its related activities is not taxed. However, it will be considered for tax rate purposes when calculating taxes on any non-farm income you may have.
- Is income up to Rs 5 lakh tax-free?
No, income up to Rs 5 lakh is not exempt. However, individuals earning up to Rs 2.5 lakh are not taxed.
- Can I switch income tax regimes for my tax return?
Yes, you can choose to file your income tax return under the old regime or the new regime depending on your preference.
- Will there be changes to the income tax schedule in India?
Yes, income tax schedules in India are subject to change.
- Who changed the income tax table in India?
The Indian Ministry of Finance has proposed changes to the Indian Income Tax Schedule.
- When are the proposed changes to the income tax schedule in India?
The country’s finance minister has announced changes in Indian income tax rates. The proposal is usually presented when the annual budget is announced in February each year.