Income Tax Slab for AY 2024-25 – Individuals – Simplified

The income tax slab for AY 2024-25 are different in old and new tax regimes. Since both old and new tax regimes currently co-exist in India, there is often confusion when determining the applicable tax rates based on the taxable income slab. Navigating through the income tax slabs and calculating the tax liability can be a complex task, especially for individuals with taxable income slab falling within multiple slabs. Therefore, it is essential for taxpayers to thoroughly understand the slabs under the provisions of both tax regimes and choose the one that minimizes their tax burden effectively.

As per the latest update from CBDT, around 8 lacs income tax returns for AY 2024-25 have already been filed from 1^st April, 2024 to 5^th May, 2024. Out of these, 7.50 lacs returns have also been processed by the department. However, before filing tax returns, it is pertinent to keep in mind the income tax slab for AY 2024-25 and the options to file under old or new scheme depending on the tax benefit which varies from person to person.

Income Tax Slab for AY 2024-25

In India, an individual’s tax liability is determined by the income tax slabs they fall into, which is based on their taxable income. As income increases, so does the applicable tax rate, resulting in higher tax payments for those in higher income brackets. Thus, in India, the progressive tax system is followed.

New Tax Regime for AY 2024-25

Till FY 2022-23, the default tax regime was the old tax regime. If an individual wanted to opt for the new tax regime, one had to file Form 10-IEA. However, from FY 2023-24 i.e. AY 2024-25, the new tax regime will be the default tax regime.

Previously, up until the fiscal year 2022-23, individuals had to file Form 10-IE to indicate their choice to opt for the new tax regime, as it was not the default option. However, from the fiscal year 2023-24 onwards, the new tax regime has become the default. This means that taxpayers will automatically be enrolled in the new regime unless they specify otherwise. To opt for the old tax regime, individuals, HUFs, AOPs (excluding co-operative societies), BOIs, and Artificial Judicial Persons (AJP) with income from business and profession must use the new Form 10-IEA. This form must be submitted within the timeframe specified under section 139(1) to either switch to the old regime or to re-enter the new scheme.

Basic Differences between the old and new tax regimes

While the basic difference between the old and new tax regimes that we often discuss is regarding the exemptions and deductions not available in the new tax structure, there are a some other major differences as explained below:-

• In the old tax regime, for individuals, the income tax slab for AY 2024-25 has been categorized on the basis of age into 3 categories – Individuals less than 60 years, resident individuals who are senior citizens i.e. above 60 years but less than 80 years of age and resident individuals who are super senior citizens i.e. above 80 years. However, the income tax slab for AY 2024-25 is the same for all categories of individuals under the new tax regime.
• In the old tax regime, the resident individuals (not NRIs) could avail the rebate u/s 87A upto 5 lacs. This limit has increased to 7 lacs u/s 87A in the new tax regime.
• The highest rate of surcharge has also changed for the income tax slab for AY 2024-25 under the old and new tax regime. Under the new tax regime, the rate of surcharge is capped at 25% of income tax for AY 2024-25.

Income Tax Slab for AY 2024-25 – New Tax Regime

The income tax slab for AY 2024-25 under the new tax regime and the rate of tax for each slab for all individuals is given below:-

Income Tax Slab for AY 2024-25 – Old Tax Regime

The income tax slab for AY 2024-25 under the old tax regime and the rate of tax for each slab for each category of individuals is given below:-

Rebate u/s 87A

Section 87A of the Income Tax Act provides significant tax relief for resident individuals with lower incomes.

The eligibility for claiming rebate u/s 87A depends on the following two conditions:-

• The individual must be a resident individual, and
• The total income after deductions must be less than 5 lacs under the old tax regime or less than 7 lacs under the new tax regime.

The amount if rebate u/s 87A is either the tax amount or Rs. 12,500, whichever is lower. This rebate reduces the tax burden for individuals and thereby effectively encouraging savings and tax compliance.

Surcharge under Income Tax

A surcharge in income tax is an additional charge on the tax liability of individuals and entities whose income exceeds certain thresholds. This surcharge is levied on the amount of income tax calculated as per the applicable income tax slab.

The surcharge rates vary based on the level of income and the category of individual as detailed hereunder:-

Total Income	Rate of Surcharge
If Total Income is more than Rs. 50 lacs and less than Rs. 1 crore	10% of income tax
If Total Income is more than Rs. 1 crore and less than Rs. 2 crores	15% of income tax
If Total Income is more than Rs. 2 crores and less than Rs. 5 crores	25% of income tax
If Total Income is more than Rs. 5 crores	37% of income tax

However, under the new tax regime, the rate of surcharge is capped at 25% of income tax for AY 2024-25.

Health and Education Cess

The Health and Education Cess is a form of tax levied in India to fund health and education initiatives. It is an additional surcharge on the total tax payable, aimed at providing necessary financial support for these critical sectors.

The cess is levied at a rate of 4% on the total income tax payable, including the surcharge, if any.

Impact on income tax slab by Budget 2024

Finance Minister Nirmala Sitharaman has not altered the income tax slab rates in the interim Budget for 2024. Consequently, the income tax slabs and rates will stay the same for the FY 2024-25, commencing on April 1, 2024. Therefore, individuals must evaluate both the old and new tax regimes to minimize their income tax liability.

To know more about the latest changes in Sec 206AA relating to TDS on inoperative PAN, read here.