Income Tax Slabs in India 2024

Income tax in India is levied based on a progressive tax structure, meaning that individuals with higher incomes are taxed at higher rates. The tax system is designed to ensure fairness, where individuals are taxed according to their ability to pay. Every year, the Union Budget updates the income tax slabs, affecting both salaried and non-salaried taxpayers.

Income Tax Slabs for FY 2023-24, 2024-25 | AY 2024-25 (New & Old Tax Regime)

The Government of India provides two tax regimes for individual taxpayers: the New Tax Regime (introduced in FY 2020-21) and the Old Tax Regime. Both have distinct tax slabs, and taxpayers can choose the one that best suits their financial situation. The New Tax Regime offers lower tax rates but removes most deductions and exemptions, while the Old Tax Regime allows for tax savings through deductions like Section 80C, HRA, and others.

Below is a breakdown of the income tax slabs under both regimes for Financial Years (FY) 2023-24 and 2024-25, applicable for Assessment Year (AY) 2024-25.

New Tax Regime Slabs (FY 2023-24 and FY 2024-25)

Under the New Tax Regime, no exemptions or deductions (like 80C, 80D, etc.) can be claimed, but the tax rates are reduced:

Income Range (₹)	Tax Rate
Up to ₹2.5 lakh	Nil
₹2.5 lakh – ₹5 lakh	5%
₹5 lakh – ₹7.5 lakh	10%
₹7.5 lakh – ₹10 lakh	15%
₹10 lakh – ₹12.5 lakh	20%
₹12.5 lakh – ₹15 lakh	25%
Above ₹15 lakh	30%

Key Highlights of the New Tax Regime:

No deductions or exemptions like 80C, 80D, or HRA can be claimed.
Rebate under Section 87A: Taxpayers with an income up to ₹7 lakh will receive a rebate of up to ₹25,000, effectively making their tax liability zero.

Old Tax Regime Slabs (FY 2023-24 and FY 2024-25)

The Old Tax Regime allows taxpayers to claim a wide range of deductions and exemptions, including those under Section 80C, 80D, HRA, and LTA.

Income Range (₹)	Tax Rate
Up to ₹2.5 lakh	Nil
₹2.5 lakh – ₹5 lakh	5%
₹5 lakh – ₹10 lakh	20%
Above ₹10 lakh	30%

Key Features of the Old Tax Regime:

Deductions and exemptions can be claimed, such as:

Section 80C: Up to ₹1.5 lakh for investments in PPF, EPF, ELSS, etc.
Section 80D: Deductions for health insurance premiums.
HRA Exemption: House Rent Allowance deductions for salaried individuals.
Standard Deduction: ₹50,000 for salaried employees.
Rebate under Section 87A: Available for income up to ₹5 lakh, providing a rebate of up to ₹12,500, reducing tax liability to zero.

Choosing Between the New and Old Tax Regime

Taxpayers need to weigh the benefits of lower tax rates under the New Tax Regime against the deductions and exemptions available in the Old Tax Regime. Here’s a guide to help you decide:

1. Opt for the New Tax Regime if:

You have fewer investments or deductions to claim.
You prefer a simpler tax-filing process with straightforward rates.

2. Opt for the Old Tax Regime if:

You have significant deductions (like 80C for investments, home loan interest, health insurance premiums, etc.).
You want to leverage tax-saving instruments for long-term benefits.

Rebate under Section 87A (Applicable to Both Regimes)

In both regimes, Section 87A provides a rebate for taxpayers whose total income does not exceed ₹5 lakh under the Old Tax Regime and ₹7 lakh under the New Tax Regime. This rebate brings the effective tax liability down to zero.