Income Tax Slabs For FY 2022-23: What Will Be Tax Rates And Slabs In New Year For ITR Filing?
The government announces any changes in the Income Tax rates during the annual Union Budget announcement in February.
Every year, the government decides how much tax people have to pay based on how much they earn. This is called the "income tax slab" and it is announced by the finance minister in February as part of the Union Budget, and once it is passed by the parliament, it becomes effective from April of that year. The income tax slab that was announced in February 2022 went into effect starting April 1, 2022. This year, the government has not changed the income tax slabs, so people will pay the same amount of tax in FY22-23 as they did last year.
Until the financial year 2019-20, there was a single tax system with four tax brackets and corresponding tax rates. Additionally, individuals were able to claim deductions under certain sections, such as 80C and 80D, and receive tax exemptions for things like house rent allowance and leave travel concession, in order to lower their tax obligations.
Starting in the financial year 2020-21, a new tax regime was introduced. This new regime has lower tax rates compared to the previous system, but individuals have to give up around 70 commonly claimed deductions and exemptions if they choose to opt into the new tax regime. This new tax regime consists of seven tax brackets with corresponding tax rates. Moreover, financial experts expect that the income tax slabs that were applicable in FY22-23 are going to be the same for the upcoming FY23-24, with maybe some very minor changes.
Tax Slabs Under Old Regime
Let’s take a look at which tax slabs are applicable as per the old income tax regime:
Those with annual income from ₹0 to ₹2.5 lakh: 0% Tax
Those with annual income above ₹2.5 lakh to ₹5 lakh: 5% Tax
Those with annual income above ₹5 lakh to ₹10 lakh: 20% Tax
Those with annual income above ₹10 lakh to ₹20 lakh: 30% Tax
Those with annual income above ₹20 lakh: 30% Tax
Tax Slabs Under New Regime
Let’s take a look at which tax slabs are applicable as per the new income tax regime:
Those with annual income from ₹0 to ₹2.5 lakh: 0% Tax
Those with annual income above ₹2.5 lakh to ₹5 lakh: 5% Tax
Those with annual income above ₹5 lakh to ₹7.5 lakh: 10% Tax
Those with annual income above ₹7.5 lakh to ₹10 lakh: 15% Tax
Those with annual income above ₹10 lakh to ₹12.5 lakh: 20% Tax
Those with annual income above ₹12.5 lakh to ₹15 lakh: 25% Tax
Those with annual income above ₹15 lakh and above: 30% Tax
Also Read: Income Tax Investment Proof Submission for Employers