Revised income tax slabs, rates for new tax regime announced in Budget 2023

Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income upto Rs.7 lakh will not pay any taxes.

The income tax slabs under the new income tax regime will be as follows:

• Rs 0 to Rs 3 lakh - Nil
• Rs 3 lakh to 6 lakh - 5%
• Rs 6 lakh to 9 lakh - 10%
• Rs 9 lakh to Rs 12 lakh - 15%
• Rs 12 lakh to Rs 15 lakh - 20%
• Above Rs 15 lakh - 30%

Further, the new income tax regime becomes the default tax regime. However, the individuals will have an option to continue with the old income tax regime. The government has reduced the surcharge of the highest rate from 37% currently to 25% in new tax regime.