Income tax is a kind of direct tax among the two types of taxes – direct tax and Indirect Tax. Income Tax is charged by the government on the income earned by the taxpayer or any profit or revenue generated by him in a specific Fiscal Year i.e. the year in which income is generated.
However, an assessee pays the income tax in the assessment year 2024-25 i.e. the year next to the FY 2023-24 in which the income of the taxpayer is assessed or evaluated. Provisions to deal with income tax are mentioned in the Income Tax Act, of 1961. Also, SAG Infotech company is delivering income tax slab rates for FY 2023-24 and AY 2024-25 for taxpayers.
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Let’s have a look at the income tax slabs for different taxpayers for the AY 2024-2025.
Income Slab & Tax Rates (AY 2024-25) for Resident Individual Age =>60 years
| Income Slab | Income Tax |
|---|---|
| Upto Rs. 2,50,000 | NIL |
| Rs. 2,50,000 – Rs. 5,00,000 | 5% |
| Rs. 5,00,000 – Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
| Surcharge( subject to Marginal Relief ) | 10% (If taxable income > Rs. 50 lacs) |
| 15% (If taxable income > Rs. 1 Crore) | |
| 25% (If taxable income > Rs. 2 Crore) | |
| 37% (If taxable income > Rs. 5 Crore) | |
| Health & Education Cess | 4% of(Income Tax + Surcharge) |
Surcharge
Note: The same income tax slab & rates are applicable to any Non-Resident Individual (NRI), Hindu Undivided Family (HUF), Association Of Persons (AOP), Body Of Individuals (BOI) and Artificial Juridical Person (AJP).
Now, we are coming on to a new income tax slab & rates are applicable on Senior Citizens for FY 2023-24 i.e. the citizens who are above 60 years of age but below 80 years of age.
Recommended: Calculate your Taxable Income with the Free Income Tax Calculator
Income Slab & Tax Rates for Senior Citizens (FY 2023-24 & AY 2024-25)
| Income Slab | Income Tax |
|---|---|
| Upto Rs. 3,00,000 | NIL |
| Rs. 3,00,000 – Rs. 5,00,000 | 5% |
| Rs. 5,00,000 – Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30 |
| Surcharge( subject to Marginal Relief ) | 10% (If taxable income > Rs. 50 lacs) |
| 15% (If taxable income > Rs. 1 Crore) | |
| 25% (If taxable income > Rs. 2 Crore) | |
| 37% (If taxable income > Rs. 5 Crore) | |
| Health & Education Cess | 4% of (Income Tax + Surcharge) |
Income Tax slab & rates for the very senior citizens FY 2023-24 i.e. the citizens of age 80 years or above is showcased in a below-given table in which the tax exemption limit of income extends to Rs. 5,000,000. Here we go.
Income Slab & Tax Rates (AY 2024-25) for Income of Super Senior Citizens
| Income Slab | Income Tax |
|---|---|
| Upto Rs. 5,00,000 | NIL |
| Rs. 5,00,000 – Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
| Surcharge( subject to Marginal Relief ) | 10% (If taxable income > Rs. 50 lacs) |
| 15% (If taxable income > Rs. 1 Crore) | |
| 25% (If taxable income > Rs. 2 Crore) | |
| 37% (If taxable income > Rs. 5 Crore) | |
| Health & Education Cess | 4% of (Income Tax + Surcharge) |
Note: Rebate for individuals with income below Rs 5,00,000 u/s 87A. The rebate is Rs 12,500 or 100% of income tax (whichever is lesser).
Now, we shall discuss the different Income Tax slabs & tax rates applicable to the income of Firms, Cooperative Societies, Local Authorities and Companies.
Income Tax Slab & Rates Applicable on Cooperative Society
| Income Slab | Income Tax |
|---|---|
| Upto Rs. 10,000 | 10% |
| Rs. 10,000 – Rs. 20,000 | 20% |
| Above Rs. 20,000 | 30% |
| Surcharge( subject to Marginal Relief ) | 12% (If taxable income > Rs. 1 Crore) |
| Health & Education Cess | 4% of (Income Tax + Surcharge) |
Income Tax Slab & Rates Applicable to Firm
| Particular | Income Tax |
|---|---|
| Income Tax | 30% |
| Surcharge( subject to Marginal Relief ) | 12% (If taxable income > Rs. 1 Crore) |
| Health & Education Cess | 4% of (Income Tax + Surcharge) |
Income Tax Slab & Rates Applicable on Local Authority
| Particular | Income Tax |
|---|---|
| Income Tax | 30% |
| Surcharge( subject to Marginal Relief ) | 12% (If taxable income > Rs. 1 Crore) |
| Health & Education Cess | 4% of (Income Tax + Surcharge) |
Income Tax Slab & Rates Applicable to Different Companies
For the Domestic Company which is claiming exemptions and whose turnover in FY 2017-18 was up to Rs. 400 crores, the new income tax rates and slabs are as follows:
| Particular | Income Tax |
|---|---|
| Income Tax | 25% |
| Surcharge( subject to Marginal Relief ) | 7% (Taxable income above ₹ 1 crore– Up to ₹ 10 crore) |
| 12% (If taxable income > Rs. 10 Crore) | |
| Health & Education Cess | 4% of (Income Tax + Surcharge) |
For the Domestic Company which is claiming exemptions and whose turnover in FY 2017-18 was more than Rs. 400 crores, the new income tax slabs and rates for FY 2023-24 are as follows:
| Particular | Income Tax |
|---|---|
| Income Tax | 30% |
| Surcharge( subject to Marginal Relief ) | 7% (Taxable income above ₹ 1 crore– Up to ₹ 10 crore) |
| 12% (If taxable income > Rs. 10 Crore) | |
| Health & Education Cess | 4% of (Income Tax + Surcharge) |
For the Domestic Manufacturing Company which is not claiming exemptions (under section 115BAA), the income tax slabs and rates are as follows:
| Particular | Income Tax |
|---|---|
| Income Tax | 22% |
| Surcharge | 10% |
| Health & Education Cess | 4% of (Income Tax + Surcharge) |
For the Domestic Manufacturing Company which is a NEW company (under section 115BAB), the income tax slabs and rates FY 2023-24 are as follows:
| Particular | Income Tax |
|---|---|
| Income Tax | 15% |
| Surcharge | 10% |
| Health & Education Cess | 4% of (Income Tax + Surcharge) |
Income Tax Slab & Rates Applicable to Foreign Company
| Particular | Income Tax |
|---|---|
| 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% |
| Surcharge | 2% (Iftaxable income >Rs. 1 Crore) |
| 5% (If taxable income > Rs. 10 Crore) | |
| Health & Education Cess | 4% of (Income Tax + Surcharge). |
Surcharge and Marginal Relief on it
An income Tax Surcharge refers to an additional charge or added tax which is payable on income tax by the individual having a higher income inflow during a particular fiscal year.
Marginal Relief on Surcharge
The taxpayer has to pay a surcharge on income tax at applicable rates when his taxable income is more than Rs. 50,00,000 or Rs. 100,00,000. However, the surcharge is reduced when the increase in ‘Income Tax + Surcharge’ > the increased income over Rs. 50,00,000 or Rs. 100,00,000.
‘Surcharge’ is reduced to a limit which will result in ‘Income Tax + Surcharge’ = increase in ‘Total Taxable Income’ over Rs. 50,00,000 or Rs. 100,00,000. The amount so lessens from ‘Surcharge’ is known as ‘Marginal Relief on Surcharge’.
Section 115BAA – New Section that lowers the tax rate for Domestic Companies
Section 115BAA is a New Section which was added w.e.f. A.Y 2020-21. This section offers an option for domestic companies to pay lower taxes at 22 %. This tax rate of 22% will become 25.168% under section 115BAA after adding a 10% surcharge and 4% cess. The computation of income under this option is subject to the following conditions:
- Exemption/deduction under the below-mentioned sections is not claimed.
- 10AA [SEZ units]
- 32(1)(iia) [additional depreciation qua new plant and machinery @ 20%/ 30%]
- 32AD [15% on new assets in undertaking set up in mentioned backward areas of Andhra Pradesh, Bihar, Telangana, and West Bengal]
- 33AB [prescribed %age of amounts deposited with Tea/ Coffee/ Rubber Board]
- 33ABA [prescribed %age of amounts deposited in Site Restoration Account]
- 35(1)(ii)/(iia), 35(2AA) [prescribed deduction for scientific research]
- 35AD [expenditure on prescribed business]
- 35CCC [expenditure on agricultural extension project]
- 35CCD [expenditure on skill development project]
- Under Part C of Chapter VIA other than sec- 80JJAA of the I-T Act (like 80IA/ IB/ IC/ ID/ IE & so on)
- Carry-forward losses are not settled off to the limit that the loss relates to deductions specified above. These losses also would not be permitted to be carried forward to subsequent years.
- Depreciation except for the additional depreciation u/s 32(1)(iia) is duly claimed.
Section 115BAB – New Section that lowers the tax rate for Domestic Manufacturing Companies
Section 115BAB is a New Section which was added w.e.f. A.Y 2020-21. This section offers an option for domestic manufacturing companies to pay lower taxes at 15 %. This tax rate will also include a 0% surcharge and a 4% cess. The availability of the option is subject to the condition that the company is established and registered on or after 1st October 2019 and starts manufacturing operations by or before 31st March 2023.
- Alike section 115BAA provisions, income for the above-mentioned lower rate, has to be calculated without claiming exemptions & deductions and setting off the losses which have been brought forward.
- Besides, the company shall not be allowed to subsequently drop out of the option if any of the options available under sections 115BAB & 115BAA is chosen by it.
Additional requirements for the execution of this option are as follows:
- The company must not be found by dividing or reconstructing the business which is in existence already.
- The company must not use a building hitherto used as a convention centre or hotel.
- The company must not use the plant or machinery used earlier for any purpose. However, the used plant and machinery can be reused to the limit of 20% of the total value of the plant and machinery.
Section 115JB – Recent amendments that lower down MAT on book profit for companies not opting for beneficial option u/s 115BAA/ 115BAB
Amendments have been made in the provisions of section 115JB to bring down the Minimum Alternate Tax (MAT) on book profit. MAT shall be reduced to 15% from 18.5% w.e.f. the assessment year 2020-21.
Note: Companies opting for the lower tax option u/s 115BAA/ 115BAB are exempted from MAT on book profit u/s 115JB.
So these are categories of the taxpayer defined by the income tax department if a taxpayer belongs to any one of these categories, then he/she has to pay the income tax because it is mandatory.
Online filing of income tax returns is quite an easy process with available tools and software. SAG Infotech company also provides an Income Tax E-Filing solution to upload returns directly from the software, named Gen Income Tax Return Filing software.
