Income Tax Rates for Financial Year 2022-23 / AY 2023-24 (2023)

Income Tax Rates for Financial Year (FY) 2022-23 / Assessment Year (AY) 2023-24

Different tax rates have been provided for various categories of taxpayers and for different sources of income. Individuals/HUFs/AOP/BOI are taxed as per the different slab rates. However, companies are taxed at fixed rate, except for certain specified incomes. This write-up will provide you the information on tax rates applicable to various taxpayers.

Tax Rates

1. 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

Individuals

(Other than senior and super senior citizen)

Net Income Range

Rate of Income-tax

Assessment Year 2023-24

Assessment Year 2022-23

Up to Rs. 2,50,000

Rs. 2,50,000 to Rs. 5,00,000

5%

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

20%

Above Rs. 10,00,000

30%

30%

Senior Citizen

(who is 60 years or more at any time during the previous year)

Net Income Range

Rate of Income-tax

Assessment Year 2023-24

Assessment Year 2022-23

Up to Rs. 3,00,000

Rs. 3,00,000 to Rs. 5,00,000

5%

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

20%

Above Rs. 10,00,000

30%

30%

Super Senior Citizen

(who is 80 years or more at any time during the previous year)

Net Income Range

Rate of Income-tax

Assessment Year 2023-24

Assessment Year 2022-23

Up to Rs. 5,00,000

Rs. 5,00,000 to Rs. 10,00,000

20%

20%

Above Rs. 10,00,000

30%

30%

Hindu Undivided Family (Including AOP, BOI and Artificial Juridical Person)

Net Income Range

Rate of Income-tax

Assessment Year 2023-24

Assessment Year 2022-23

Up to Rs. 2,50,000

Rs. 2,50,000 to Rs. 5,00,000

5%

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

20%

Above Rs. 10,00,000

30%

30%

Add:

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

Rate of Surcharge

Assessment Year 2023-24Assessment Year 2022-23
Range of Income

Range of Income

Rs. 50 Lakhs to Rs. 1 Crore

Rs. 1 Crore to Rs. 2 CroresRs. 2 Crores to Rs. 5 CroresRs. 5 crores to Rs. 10 CroresExceeding Rs. 10 CroresRs. 50 Lakhs to Rs. 1 CroreRs. 1 Crore to Rs. 2 CroresRs. 2 Crores to Rs. 5 CroresRs. 5 crores to Rs. 10 Crores

Exceeding Rs. 10 Crores

10%

15%25%37%37%10%15%25%37%

37%

Note:

(1) The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax undersections 111A,112Aand115AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.

(2) From Assessment Year 2023-24 onwards:

  • The maximum rate of surcharge on tax payable on dividend income or capital gain referred to in Section 112, shall be 15%.
  • The surcharge rate for AOP with all members as a company, shall be capped at 15%.

However, marginal relief is available from surcharge in following manner-

i. in case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

ii. in case where net income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the 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. in case where net income exceeds Rs. 2 crore but doesn’t exceed Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the 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. in case where net income exceeds Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore.

(Video) Income Tax Rate AY 2023-24 FY 2022-23 | Income Tax Slab AY 2023-24 Income Tax on Partnership Firm

b. Health and Education Cess:Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.

Note:A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate undersection 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500, whichever is less.

1.1. Special tax Rate for Individual and HUFs

The Finance Act, 2020, has provided an option to Individuals and HUF for payment of taxes at the following reduced rates from Assessment Year 2021-22 and onwards:

Total Income (Rs)Rate
Up to 2,50,000Nil
From 2,50,001 to 5,00,0005%
From 5,00,001 to 7,50,00010%
From 7,50,001 to 10,00,00015%
From 10,00,001 to 12,50,00020%
From 12,50,001 to 15,00,00025%
Above 15,00,00030%

Add:

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

Range of Income

Rs. 50 Lakhs to Rs. 1 Crore

Rs. 1 Crore to Rs. 2 CroresRs. 2 Crores to Rs. 5 CroresRs. 5 crores to Rs. 10 Crores

Exceeding Rs. 10 Crores

10%

15%25%37%

37%

Note:The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax undersections 111A,112,112Aand115AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.

However, marginal relief is available from surcharge in following manner-

i. in case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

ii. in case where net income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the 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. in case where net income exceeds Rs. 2 crore but doesn’t exceed Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the 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. in case where net income exceeds Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore.

b.Health and Education Cess:Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.

Note 1:A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate undersection 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500, whichever is less.

(Video) Income Tax Slab FY 2022-23 AY 2023-24 | New Income Tax Slab Rate for FY 2022-23 AY 2023-24

Note 2: The option to pay tax at lower rates shall be available only if the total income of assessee is computed without claiming specified exemptions or deductions:

2. Partnership Firm

For the Assessment Year 2023-24, a partnership firm (including LLP) is taxable at 30%.

Add:

(a)Surcharge :The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one 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 four percent of such income-tax and surcharge

3. Local Authority

For the Assessment Year 2022-23 & 2023-24, a local authority is taxable at 30%.

Add:

(a)Surcharge:The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one 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 four percent of such income-tax and surcharge.

4. Domestic Company

Income-tax rates applicable in case of domestic companies for assessment year 2022-23 and 2023-24 are as follows:

Domestic Company

Assessment Year 2022-23

Assessment Year 2023-24

♦ Where its total turnover or gross receipt during the previous year 2019-20 does not exceed Rs. 400 crore

25%

NA

♦ Where its total turnover or gross receipt during the previous year 2020-21 does not exceed Rs. 400 crore

NA

25%

♦ Any other domestic company

30%

30%

Add:

(Video) Income Tax Slab Rate for F.Y. 2022-23 & A.Y 2023-24 & Slab rate for F.Y 2021-22 & A.Y 2022-23

(a)Surcharge :The amount of income-tax shall be increased by a surcharge at the rate of 7% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 12% of such tax, where total income exceeds ten crore rupees. The surcharge shall be subject to marginal relief, which shall be as under:

(i) Where income exceeds Rs. 1 crore but not exceeding Rs. 10 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.

(ii) Where income exceeds Rs. 10 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore

(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 four percent of such income-tax and surcharge.

4.1. Special Tax rates applicable to a domestic company

The special Income-tax rates applicable in case of domestic companies for assessment year 2022-23 and 2023-24 are as follows:

Domestic Company

Assessment Year 2022-23

Assessment Year 2023-24

♦ Where it opted forsection 115BA

25%

25%

♦ Where it opted forSection 115BAA

22%

22%

♦ Where it opted forSection 115BAB

15%

15%

Surcharge :The rate of surcharge in case of a company opting for taxability underSection 115BAAorSection 115BABshall be flat 10% irrespective of amount of total income.

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 four percent of such income-tax and surcharge.

MAT :The domestic company who has opted for special taxation regime underSection 115BAA&115BABis exempted from provision of MAT. However, no exemption is available in case wheresection 115BAhas been opted.

In that case, the provisions of Minimum Alternate Tax (MAT) applies, tax payable cannot be less than 15% (+HEC) of “Book profit” computed as persection 115JB. However, MAT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange. For provisions relating to MAT refer tutorial on “MAT/AMT” in tutorial section.

5. Foreign Company

Assessment Year 2022-23 and Assessment Year 2023-24

Nature of Income

Tax Rate

Royalty received from Government or an Indian concern in pursuance of an agreement made with the Indian concern after March 31, 1961, but before April 1, 1976, or fees for rendering technical services in pursuance of an agreement made after February 29, 1964 but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government

50%

Any other income

40%

Add:

(a) Surcharge:The amount of income-tax shall be increased by a surcharge at the rate of 2% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 5% of such tax, where total income exceeds ten crore rupees. However, the surcharge shall be subject to marginal relief, which shall be as under:

(Video) Income Tax Rate for AY 2023-24 | Income Tax Slab for AY 2023-24 | Income Tax for FY 2022-23

(i) Where income exceeds one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

(ii) Where income exceeds ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of ten crore rupees by more than the amount of income that exceeds ten 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 four percent of such income-tax and surcharge.

6. Co-operative Society

Assessment Year 2022-23 and Assessment Year 2023-24

Taxable income

Tax Rate

Up to Rs. 10,000

10%

Rs. 10,000 to Rs. 20,000

20%

Above Rs. 20,000

30%

Add:

(a) Surcharge:The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).

Note: From Assessment Year 2023-24 onwards, the rate of surcharge in the case of co-operative societies having income between 1 crore to 10 crores is reduced from 12% to 7%.

(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 four percent of such income-tax and surcharge.

6.1. Special tax rates applicable to a Co-operative societies

Taxable incomeTax Rate
Any income22%

Note:

The Finance Act, 2020 has inserted a newSection 115BADin Income-tax Act to provide an option to the co-operative societies to get taxed at the rate of 22%plus10% surcharge and 4% cess. The resident co-operative societies have an option to opt for taxation under newlySection 115BADof the Act w.e.f. Assessment Year 2021-22. The option once exercised under this section cannot be subsequently withdrawn for the same or any other previous year.

If the new regime ofSection 115BADis opted by a co-operative society, its income shall be computed without providing for specified exemption, deduction or incentive available under the Act. The societies opting for this section have been kept out of the purview of Alternate Minimum Tax (AMT). Further, the provision relating to computation, carry forward and set-off of AMT credit shall not apply to these assessees

The option to pay tax at lower rates shall be available only if the total income of co-operative society is computed without claiming specified exemptions or deductions

(Video) INCOME TAX (FINANCIAL YEAR:2022-23) (ASSESSMENT YEAR: 2023-24)

[As amended by Finance Act, 2022]

(Republished with Amendment, Source -Income Tax Website)

FAQs

What is the tax allowance for 2023 24? ›

From this point upwards, income tax of 19% (a 1% cut from the current rate) and employee national insurance of 12% (a reduction from the 13.25% in force until next month) are expected to apply in 2023/24, a combined rate of 31% that reduces take-home pay to 69% of each extra pound earned.

What are the tax rates for 2022-23? ›

Income tax on earned income is charged at three rates: the basic rate, the higher rate and the additional rate. For 2022/23 these three rates are 20%, 40% and 45% respectively.

How do you calculate income tax for the assessment year 2022-23? ›

To calculate Income tax, include income from all sources. Include:
  1. Income from Salary (salary paid by your employer)
  2. Income from house property (add any rental income, or include interest paid on home loan)
  3. Income from capital gains (income from sale purchase of shares or house)

What will be the tax rate for 2022? ›

In the Union Budget speech for 2022, finance minister Nirmala Sitharaman has announced that there will be no revision in tax slabs for the financial year 2022-23. Moreover, the income tax rates have not been revised for the financial year 2022-23.

What are the new tax rates for 2023? ›

2023 Tax Bracket Changes Could Increase Workers' Take-Home Pay
Tax Rate2023 Taxable Income2022 Taxable Income
10%$0 to $22,000$0 to $20,550
12%Over $22,000 to $89,450Over $20,550 to $83,550
22%Over $89,450 to $190,750Over $83,550 to $178,150
24%Over $190,750 to $364,200Over $178,150 to $340,100
3 more rows
5 days ago

What are the tax rates for 2023? ›

2023 federal income tax brackets
Tax rateTaxable income bracketTaxes owed
10%$0 to $11,000.10% of taxable income.
12%$11,001 to $44,725.$1,100 plus 12% of the amount over $11,000.
22%$44,726 to $95,375.$5,147 plus 22% of the amount over $44,725.
24%$95,376 to $182,100.$16,290 plus 24% of the amount over $95,375.
3 more rows
7 days ago

What is the basic rate of income tax? ›

Basic rate taxpayers

The current basic rate of income tax of 20% has applied since 2008/09 and following the announcement on 17th October, will remain at 20% for the foreseeable future.

What is the current income tax rate? ›

For the 2022 tax year, there are seven federal tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your tax bracket is determined by your filing status and taxable income.

How is tax calculated on salary? ›

The year during which your income tax is calculated for the previous financial year is called the assessment year.
...
Components for calculating the income tax.
Income SlabTax Rate
2.5 lakhs – 5 lakhs10% of exceeding amount
5 lakhs – 10 lakhs20% of the exceeding amount
Above 10 lakhs30% of the exceeding amount
1 more row
3 Aug 2022

How much tax will I pay if my salary is 50000? ›

If you make ₹ 50,000 a year living in India, you will be taxed ₹ 6,000. That means that your net pay will be ₹ 44,000 per year, or ₹ 3,667 per month. Your average tax rate is 12.0% and your marginal tax rate is 12.0%.

How can I save my income tax in India on salary 2022 23? ›

6 Ways to Save Income Tax Under Section 80C
  1. Life Insurance. Life Insurance does not only provide full life coverage, but it is also the best way to save Taxes. ...
  2. ELSS. ...
  3. Tax Saving Fixed Deposit. ...
  4. Senior Citizens Savings Scheme (SCSS) ...
  5. Provident Fund. ...
  6. National Saving Certificates.
19 Oct 2022

How much tax should I pay for 12 lakhs salary? ›

New Income Tax Slabs for Individuals in FY 2021-2022
Income Tax SlabTax Rate
From Rs.10,00,001 to Rs.12,50,00020% of the total income that is more than Rs.10 lakh + 4% cess
From Rs.12,50,001 to Rs.15,00,00025% of the total income that is more than Rs.12.5 lakh + 4% cess
5 more rows

What is tax exemption limit? ›

If your income is below ₹2.5 lakh, you do not have to file Income Tax Returns (ITR).

What is the standard deduction for senior citizens in 2022? ›

Taxpayers who are at least 65 years old or blind will be able to claim an additional 2022 standard deduction of $1,400 ($1,750 if using the single or head of household filing status).

Which slab is better for income tax? ›

Also, those with an annual income of Rs. 7.5 lakhs to Rs.
...
Old vs New: A Comparison For Different Slabs.
Income tax slab for FY 2020-21 old regimeAnnual IncomeNew Regime FY 2020-21
NilUp to Rs.2.5 lakhsNil
5%Rs.2.5 – 5 lakh5%
20%Rs.5 – 7.5 lakh10%
Rs. 7.5 – 10 lakh15%
3 more rows
25 Jul 2022

What is the standard deduction for Over 65 in 2023? ›

For 2023, assuming no changes, Ellen's standard deduction would be $15,700: the usual 2023 standard deduction of $13,850 available to single filers, plus one additional standard deduction of $1,850 for those over 65.

What is the tax rate for married filing jointly 2022? ›

32% for incomes over $170,050 ($340,100 for married couples filing jointly); 24% for incomes over $89,075 ($178,150 for married couples filing jointly); 22% for incomes over $41,775 ($83,550 for married couples filing jointly); 12% for incomes over $10,275 ($20,550 for married couples filing jointly).

Why standard deduction? ›

The purposes of introducing standard deduction are: To reduce paperwork and allow for deductions irrespective of the actual expenses. To provide tax relief to the middle-class salaried individuals. To provide benefits to pensioners.

What will 2023 Child tax Credit be? ›

The Child Tax Credit was significantly expanded in 2021 by the American Rescue Plan so families could receive up to $3,600 per child under 6 and $3,000 for those ages 6 to 17. But the changes were made for just one year, and will be reduced back to $2,000 per child in 2023.

How are long term capital gains taxed? ›

Long-term capital gains tax is a tax on profits from the sale of an asset held for more than a year (also known as a long term investment). The long-term capital gains tax rate is 0%, 15% or 20% depending on your taxable income and filing status. They are generally lower than short-term capital gains tax rates.

Is Social Security taxable? ›

You must pay taxes on up to 85% of your Social Security benefits if you file a: Federal tax return as an “individual” and your “combined income” exceeds $25,000. Joint return, and you and your spouse have “combined income” of more than $32,000.

How is tax calculated on monthly salary? ›

Income tax is calculated on monthly salary by arriving at the yearly taxable salary and tax payable. Your employer will calculate the total taxable income including salary at the beginning of the financial year. On such taxable income the employer will calculate the deductions available and the net taxable income.

What is basic rate? ›

noun. the standard or lowest level on a scale of money payable, esp in taxation.

What is the top rate of tax? ›

The majority of us pay income tax at two levels, and the amount you pay depends on how much you earn. There are two main rates of income tax set by the government: 20% and 40%.

How can I reduce my taxable income? ›

How to Lower Taxable Income
  1. Contribute significant amounts to retirement savings plans.
  2. Participate in employer sponsored savings accounts for child care and healthcare.
  3. Pay attention to tax credits like the child tax credit and the retirement savings contributions credit.
  4. Tax-loss harvest investments.
6 Sept 2022

How is marginal tax rate calculated? ›

To calculate marginal tax rate, you'll need to multiply the income in a given bracket by the adjacent tax rate. If you're wondering how marginal tax rate affects an increase in income, consider which bracket your current income falls.

How is TDS calculated on salary? ›

The employer deducts TDS on salary at the employee's 'average rate' of income tax. It will be computed as follows: Average Income tax rate = Income tax payable (calculated through slab rates) divided by employee's estimated income for the financial year.

How can I save tax on 15 lakhs? ›

1. Reduce Your Taxable Income by Up To Rs 1.5 Lakhs (Section 80C, 80CCC, 80CCD)
  1. Unit Linked Insurance Plans (ULIPs)
  2. Pension or Annuity Plans from Life Insurance Companies.
  3. Public Provident Fund (PPF) & Employee Provident Fund (EPF)
  4. New Pension Scheme Tier-I Account.
  5. Senior Citizen Savings Scheme.

What is the tax for 7 lakhs? ›

The finance minister announced that individuals with an annual income between Rs 5 lakh and Rs 7.5 lakh would pay 10% tax, and those earning Rs 7.5 lakh to Rs 10 lakh 15%. Under the old regime, with deductions, these individuals pay 20% income tax.

What is the tax on 10 lakhs? ›

Income tax slabs for new and old regime
Taxable incomeTax rates
Up to Rs. 5 lakhsNIL
Rs. 5,00,001 – Rs. 10 lakhs20% of income above Rs. 5 lakh + 4% cess on income tax
Above Rs. 10 lakhsRs. 1,00,000 + 30% of income above Rs. 10 lakh + 4% cessnt

How much tax do I pay if my salary is 60000? ›

If you make ₹ 60,000 a year living in India, you will be taxed ₹ 7,200. That means that your net pay will be ₹ 52,800 per year, or ₹ 4,400 per month. Your average tax rate is 12.0% and your marginal tax rate is 12.0%.

How can I get 10 lakhs exemption? ›

First, there is a standard deduction of Rs 50,000 for salaried individuals. This will reduce the taxable income to Rs 9.7 lakh. Then come the tax-saving investments under Sec 80C, which can reduce taxable income by up to Rs 1.5 lakh. Another Rs 50,000 can be reduced by investing in the NPS under Sec 80CCD(1b).

How can I save tax on my salary over 40 lakhs? ›

Save Income Tax on Salary
  1. Deductions under Section 80C, Section 80CCC and Section 80CCD. Citizens of India can save tax under these 3 sections. ...
  2. Medical Expenses. ...
  3. Home Loan. ...
  4. Education Loan. ...
  5. Shares and Mutual Funds. ...
  6. Long Term Capital Gains. ...
  7. Sale of Equity Shares. ...
  8. Donations.

How can I reduce my income tax in 10 lakhs? ›

Saving taxes is even easier for those upto a decent Rs 10 lakh per annum or less. Tax savings scheme under Section 80C, NPS under Section 80CCD(1b), education or house loans, and even insurance premiums can help you achieve the goal of zero tax in a given year if your annual salary is less than Rs 10 lakh per year.

How can I get zero tax on 12 lakhs? ›

Tax Deductions under Section 80(C)
  1. Investments in PPF (Public Provident Fund)
  2. Investments in EPF (Employee Provident Fund)
  3. Investments in ELSS funds (Equity-Linked Savings Scheme)
  4. Investments in NSC (National Savings Certificates)
  5. Payment of premiums against Life Insurance Policies.
23 Sept 2022

How can I save my maximum tax in India? ›

Tax Saving Schemes
  1. Public Provident Fund (PPF)
  2. Sukanya Samriddhi Yojana (SSY)
  3. National Pension System (NPS)
  4. Employees' Provident Fund (EPF)
  5. Sukanya Samriddhi Yojana Interest Rate.
  6. National Savings Certificate.
  7. House Rent Allowance.
  8. NSC Interest Rate.

How can I save maximum tax on my salary in India? ›

15 Tips to Save Income Tax on Salary
  1. House Rent Allowance (HRA)
  2. Leave Travel Allowance (LTA)
  3. Employee Contribution to Provident Fund (PF)
  4. Standard Deduction.
  5. Professional Tax.
  6. Exemption of Leave Encashment.
  7. Exemption Under Section 89(1)
  8. Exemption from the Receipt Upon Opting for Voluntary Retirement.

Which income is tax free in India? ›

As per section 10(1), agricultural income earned by the taxpayer in India is exempt from tax. Agricultural income is defined under section 2(1A) of the Income-tax Act.

What is 5 lakh tax exemption? ›

As per the updated Sec 87A, a taxpayer is eligible to get a tax rebate up to INR 12,500, if his total income falls below INR 5 lakh. Here is the Explanation for the Same: Let's assume a taxpayer's Total Income = 500,000. Exemption Limit = 250,000.

Is 5 lakh tax exemption for everyone? ›

Individuals earning equal to or less than Rs. 5 lakhs annually are eligible for tax rebate under Section 87A, making the tax liability NIL. Exemption limit in case of NRIs (Non-Resident Indians) is Rs. 2,50,000 irrespective of the age.

How much interest is tax free for seniors? ›

Also, u/s 194A of the Income Tax Act, no Tax is Deducted at Source (TDS) on interest payment of up to ₹ 50,000 by the bank, post office or co-operative bank to a Senior Citizen. This limit is to be computed for every bank individually.

Is there a tax deduction for age 65? ›

If you are age 65 or older, your standard deduction increases by $1,700 if you file as Single or Head of Household. If you are legally blind, your standard deduction increases by $1,700 as well. If you are Married Filing Jointly and you OR your spouse is 65 or older, your standard deduction increases by $1,350.

What is the income tax limit for senior citizens? ›

Income tax exemption limit is up to Rs. 3,00,000 for senior citizen aged above 60 years but less than 80 years. 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore. 15% of income tax, where the total income exceeds Rs.1 crore.

Does ay 2022 23 have standard deduction? ›

Standard Deduction RS 50000/- House Rent Allowance (HRA), Depends on salary structure and rent paid. Interest on housing loan (Section 24) Rs 3.5 lakh for affordable housing, Rs 2 lakh for others. Deductions employer's contribution to NPS u/s 80CCD(2) RS 50000/-

Is 80C deduction available in new tax regime? ›

Is it possible to claim 80C deductions and choose new income tax regime? No, unlike the old/existing tax rate regime, the new tax rate regime does not enable many deductions and exclusions. If the taxpayer chooses the New regime's concessionary tax slab rates, deductions under Section 80C are not available.

What is 80CCD limit? ›

Section 80CCD (1):

Under this section, any individual over the age of 18 who contributes to an NPS account or Atal Pension Yojana scheme can claim a deduction of up to ₹ 1,50,000 per annum.

Will the personal tax allowance increase in 2023? ›

General description of the measure

This measure will maintain the Personal Allowance and basic rate limit at their 2021 to 2022 levels up to and including 2025 to 2026. It will set the Personal Allowance at £12,570, and the basic rate limit at £37,700 for tax years: 2022 to 2023.

Will personal allowance go up in 2023? ›

Income Tax Personal Allowance

The personal allowance has been indicated as frozen until April 2026. With a potential new prime minister being appointed this is subject to change.

Will tax brackets change in 2023 UK? ›

The Chancellor also announced in the Growth Plan that the basic rate of income tax would be reduced from 20% to 19% from 6 April 2023. It is understood that this change will still be going ahead, as is the repeal of the Health and Social Care Levy.

What is the personal savings allowance for 2022 23? ›

This is less than £17,570, so you will be eligible for the starting rate for savings. We deduct the personal allowance (£12,570 in 2022/23) from the pension income which leaves £430 left to be taxed at 20%. The starting rate for savings applies to as much of the first £5,000 of taxed income that is savings income.

Is the tax code changing in 2023? ›

This was then followed by the news that the basic rate of income tax would be reduced from 20% to 19% from April 2023. This means the change will be implemented a year earlier than promised by previous chancellor of the Exchequer, Rishi Sunak, in his spring statement, in which he pledged to do this by April 2024.

What are the new income tax rates? ›

a. Income tax slab rate for New Tax regime
Income Tax SlabNew Regime Income Tax Slab Rates (Applicable for All Individuals & HUF)
Rs 7.5 lakh – Rs 10.00 lakh15%
Rs 10.00 lakhs – Rs 12.50 lakh20%
Rs 12.5 lakhs – Rs 15.00 lakh25%
> Rs 15 lakh30%
4 more rows
31 Jul 2022

What is the basic rate of income tax? ›

Basic rate taxpayers

The current basic rate of income tax of 20% has applied since 2008/09 and following the announcement on 17th October, will remain at 20% for the foreseeable future.

Do you pay tax on pension? ›

If you have a defined benefit pension (also known as a final salary or career average pension) you'll be paid an income for life, which will be taxable as earnings. You might also get a tax-free lump sum alongside this.

What percentage is emergency tax? ›

OT emergency tax code

It's similar to a BR tax code in that tax free personal allowance is overlooked, but you'll be paying tax at the higher rate (40%) or additional rate (45%).

What is the new tax code for 2022 to 2023? ›

The most common tax code for the 2022-23 tax year is 1275L. It means that you are entitled to the full Personal Allowance of £12,570. And, as the tax free Personal Allowance amount is locked in until 2026, this will remain the most common tax code until then.

Will income tax rates change in 2022? ›

In the U.S., there are seven federal tax brackets. The marginal rates — 10%, 12%, 22%, 24%, 32%, 35% and 37% — remain unchanged from 2022. However, for the 2023 tax year, the IRS is making significant adjustments to many of the income thresholds that inform these brackets.

What is the new higher rate tax band? ›

The 40% tax bracket is also known as the Higher Rate tax band and, if your income is within the boundaries of that tax band, you are liable to pay 40% tax on any earnings that are over the threshold. In the 2022/2023 tax year the higher rate 40% tax threshold starts at £50271 and stops at £150,000.

How much money can I save in my bank savings account without tax? ›

The interest that you receive from a savings account is taxable under the head “Income from other sources”. Further, Section 80TTA provides for a deduction up to Rs 10,000 on such interest income and therefore, interest earned beyond Rs 10,000 only is taxable.

How do I avoid tax on savings account interest? ›

For a residential individual (age of 60 years or less) or HUF, interest earned upto Rs 10,000 in a financial year is exempt from tax. The deduction is allowed on interest income earned from: savings account with a bank; savings account with a co-operative society carrying on the business of banking; or.

What is the tax free savings account limit for 2022? ›

The annual TFSA dollar limit for 2022 is $6,000.

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