CENTRAL GOVERNMENT EMPLOYEES - INCOME TAX

INCOME TAX RATES

ASSESSMENT YEAR 2023-2024

RELEVANT TO FINANCIAL YEAR 2022-2023

The normal tax rates applicable to a resident individual will depend on the age of the individual. However, in case of a non-resident individual the tax rates will be same irrespective of his age.

For the purpose of ascertainment of the applicable tax slab, an individual can be classified as follows:

• Resident individual below the age of 60 years. i.e. born on or after 01-04-1963

• Resident individual of the age of 60 years or above at any time during the year but below the age of 80 years. (i.e. born during 01-04-1943 to 31-03-1963)

• Resident individual of the age of 80 years or above at any time during the year. i.e. born before 01.04.1943

• Non-resident individual irrespective of the age.  

 

A new tax regime has been established by the insertion of section 115 BAC in the Income Tax Act, 1961 vide the Finance Act, 2020. Individuals and HUFs can choose between the new or old tax regime and pay applicable income tax as per slabs and rates for FY 2021-22 (AY 2022-23). This option to Individuals and HUF for payment of taxes at the reduced rates from Assessment Year 2021-22 and onwards are under the conditions that they don't claim the normal concessions available..

 

I. 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

Old Tax Regime Slab Rate FY 2022-23 New Tax Regime Slab Rate FY 2022-23
Net Taxable Income Tax Rate Net Taxable Income Tax Rate
Up to Rs. 2,50,000 Nil Up to Rs. 2,50,000 Nil
Rs. 2,50,001 to Rs 5,00,000 5% Rs. 2,50,001 to Rs 5,00,000 5%
    Rs. 5,00,001 to Rs. 7,50,000 10%
    Rs. 7,50,001 to Rs. 10,00,000 15%
Rs. 5,00,001 to Rs. 10,00,000 20% Rs. 10,00,001 to Rs. 12,50,000 20%
    Rs. 12,50,001 to Rs. 15,00,000 25%
Above Rs. 10,00,000 30% Above Rs. 15,00,000 30%

Less: Rebate under Section 87A [see Note]

Add: Surcharge and Health & Education Cess [see Note]

 

II. In case of a resident senior citizen (who is 60 years or more at any time during the previous year but less than 80 years on the last day of the previous year)

 

Old Tax Regime Slab Rate FY 2022-23 New Tax Regime Slab Rate FY 2022-23
Net Taxable Income Tax Rate Net Taxable Income Tax Rate
Up to Rs. 3,00,000 Nil Up to Rs. 2,50,000 Nil
Rs. 3,00,001 to Rs 5,00,000 5% Rs. 2,50,001 to Rs 5,00,000 5%
    Rs. 5,00,001 to Rs. 7,50,000 10%
    Rs. 7,50,001 to Rs. 10,00,000 15%
Rs. 5,00,001 to Rs. 10,00,000 20% Rs. 10,00,001 to Rs. 12,50,000 20%
    Rs. 12,50,001 to Rs. 15,00,000 25%
Above Rs. 10,00,000 30% Above Rs. 15,00,000 30%

Less: Rebate under Section 87A [see Note]

Add: Surcharge and Health & Education Cess [see Note]

 

III. In case of a resident super senior citizen (who is 80 years or above at any time during the previous year)

 

Old Tax Regime Slab Rate FY 2022-23 New Tax Regime Slab Rate FY 2022-23
Net Taxable Income Tax Rate Taxable Income Tax Rate
Up to Rs. 5,00,000 Nil Up to Rs. 2,50,000 Nil
    Rs. 2,50,001 to Rs 5,00,000 5%
    Rs. 5,00,001 to Rs. 7,50,000 10%
    Rs. 7,50,001 to Rs. 10,00,000 15%
Rs. 5,00,001 to Rs. 10,00,000 20% Rs. 10,00,001 to Rs. 12,50,000 20%
    Rs. 12,50,001 to Rs. 15,00,000 25%
Above Rs. 10,00,000 30% Above Rs. 15,00,000 30%

Add: Surcharge and Health & Education Cess [see Note]

 

The option to pay tax at lower rates shall be available only if the total income of assessee is computed without claiming following exemptions or deductions:

a) Leave Travel concession [Section 10(5)]

b) House Rent Allowance [Section 10(13A)]

c) Official and personal allowances (other than those as may be prescribed) [Section10(14)]

d) Allowances to MPs/MLAs [Section 10(17)]

e) Allowances for income of minor [Section 10(32)]

f) Deduction for units established in Special Economic Zones (SEZ) [Section 10AA];

g) Standard Deduction [Section 16(ia)]

h) Entertainment Allowance [Section 16((ii)]

i) Professional Tax [Section 16(iii)]

j) Interest on housing loan [Section 24(b)]

k) Additional depreciation in respect of new plant and machinery [Section 32(1)(iia)];

l) Deduction for investment in new plant and machinery in notified backward areas [Section 32AD];

m) Deduction in respect of tea, coffee or rubber business [Section 33AB];

n) Deduction in respect of business consisting of prospecting or extraction or production of petroleum or natural gas in India [Section 33ABA];

o) Deduction for donation made to approved scientific research association, university college or other institutes for doing scientific research which may or may not be related to business [Section 35(1)(ii)];

p) Deduction for payment made to an Indian company for doing scientific research which may or may not be related to business [Section 35(1)(iia)];

q) Deduction for donation made to university, college, or other institution for doing research in social science or statistical research [Section 35(1)(iii)];

Total income of the assessee is calculated after claiming depreciation under section 32, other than additional depreciation, and without adjusting brought forward losses and depreciation from any earlier year (if such loss or depreciation pertains to any deduction under the aforesaid sections). Further, loss under the head house property can’t be set off against other heads of Income. Moreover, such loss and depreciation willnot be carried forward.

If the assessee has any unabsorbed depreciation, relating to additional depreciation, which has not been given full effect, the corresponding adjustment shall be made to WDV of the block of assets in the prescribed manner.

In case the assessee has business or professional income, this option shall be exercised on or before the due date for furnishing the returns of income. Once the assessee has exercised the option for any previous year, it cannot be subsequently withdrawn for the same or any other previous year. The option once exercised for any previous year can be withdrawn only once in subsequent previous year (other than the year in which it was exercised) and thereafter, he shall never be eligible to exercise this option again except where such person ceases to have any business income.

If assessee does not have business or professional income, the option must be exercisedalong with the return of income for every previous year. If an assessee, after opting for Section 115BAC, claims any of prescribed deduction or allowance in any previous year, then the option to pay tax at concessional rate shall become invalid for that year.

 

a)  SURCHARGE:

  Surcharge is levied on the amount of income-tax at following rates if the total income of an assessee exceeds specified limits:

Nature of Income

Range of Total Income

Up to Rs. 50 lakh

More than Rs. 50 lakh but up to Rs. 1 crore

More than Rs. 1 crore but up to Rs. 2 crore

More than Rs. 2 crore but up to Rs. 5 crore

More than Rs. 5 crore but up to Rs. 10 crore

More than Rs. 10 crore

Individual, HUF or Artificial Judicial Person

Short-term capital gain covered under Section 111A

10%

15%

25%

37%

37%

Long-term capital gain covered under Section 112A

10%

15%

25%

37%

37%

Any other income*

10%

15%

25%

37%

37%

* The Finance (No. 2) Act, 2019 has been amended to withdraw the enhanced surcharge, i.e., 25% or 37%, as the case may be, from income chargeable to tax under section 111A and 112A. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%. However, where other income of a person does not exceed Rs. 2 crores but after including the incomes as referred to in section 111A and 112A, the total income exceeds Rs. 2 crores then irrespective of the amount of other income, surcharge shall be levied at the rate of 15% on the amount of tax payable on both normal income as well as income referred to in section 111A and 112A.

AOP or BOI

Short-term capital gain covered under Section 111A

10%

15%

25%

37%

37%

Long-term capital gain covered under Section 112A

10%

15%

25%

37%

37%

Short term or Long term capital gains on transfer of certain securities under section 115AD(1)(b)

10%

15%

25%

37%

 37%

Any other Income*

10%

15%

25%

37%

37%

* The Finance (No. 2) Act, 2019 has been amended to withdraw the enhanced surcharge, i.e., 25% or 37%, as the case may be, from income chargeable to tax under section 111A, 112A and 115AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%. However, where other income of a person does not exceed Rs. 2 crores but after including the incomes as referred to in section 111A, 112A and 115AD, the total income exceeds Rs. 2 crores then irrespective of the amount of other income, surcharge shall be levied at the rate of 15% on the amount of tax payable on both normal income as well as income referred to in section 111A, 112A and 115AD.

a) The surcharge shall be subject to marginal relief:

i)       Where income exceeds Rs. 50 lakhs, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 50 lakhs by more than the amount of income that exceeds Rs. 50 lakhs.

ii)     where income exceeds Rs. 1 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

iii)  where income exceeds Rs. 2 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore

iv)   where income exceeds Rs. 5 crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 5 crore rupees by more than the amount of income that exceeds Rs. 5 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 4% of such income-tax and surcharge.

c)  Rebate under Section 87A:

The rebate is available to a resident individual if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less.

PERMANENT ACCOUNT NUMBER (PAN)

Every assessee is required to obtain 10 alpha numeric Permanent Account Number (PAN) and quote the same in his returns, challans & correspondence. PAN can be obtained by applying in new Form No.49A at the designated Service Centres of UTITSL OR NSDL. PAN is essential for processing the Return of Income and for giving credit for taxes paid. If a person who is required to quote his Permanent Account Number fails to do so or intimates false number, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of Rs.10,000.

INCOME TAX PAYMENTS

Advance tax payments and Self-assessment tax payments have to be made in Challan No.280.

# Cost Inflation Index – For Capital Gain

The cost inflation indices for the financial years so far have been notified as under:

    Financial Year Cost Inflation Index    
    2001 – 02 100    
    2002 – 03 105    
    2003 – 04 109    
    2004 – 05 113    
    2005 – 06 117    
    2006 – 07 122    
    2007 – 08 129    
    2008 – 09 137    
    2009 – 10 148    
    2010 – 11 167    
    2011 – 12 184    
    2012 - 13 200    
    2013 - 14 220    
    2014 - 15 240    
    2015 - 16 254    
    2016 - 17 264    
  2017 – 2018272    
      

# CBIT Notification No. 44/2017 - F.No. 370142/11/2017-TPL dated 05-06-2017

This notification will come into effect on 01-04-2018 and apply to the assessment year 2018-19