Income Tax Budget 2023-24: A Quick Look On Income Tax Slab Changes Under New Regime

Finance Minister, Nirmala Sitharaman today announced a change in the income tax slabs for those under the new regime in the Union Budget 2023-24. The rebate also under the new tax regime has been hiked to Rs 7 lakhs, which means you will now have to pay tax for income upto Rs 7 lakhs under the new regime.

Income tax payable under the new tax slabs for the new tax regime for FY 2023-24 onwards

Income tax slab	Tax rate
Upto Rs 3 lakhs	Nil
Rs 3 lakh- Rs 6 lakh	5.00%
Rs 6 lakh-Rs 9 lakh	10% of the total income that is more than Rs.2.5 lakh
Rs 9 lakh-Rs 12 lakh:	15% of the total income
Rs 12 lakh- Rs 15 lakh:	20% of the total income
Over Rs 15 lakhs	30% of the total income

Old tax slabs for the new tax regime currently applicable

Income tax slab	Tax rate
Up to Rs.2.5 lakh	Nil
Above Rs.2.50 - Rs.5 lakh	5% of the total income that is more than Rs.2.5 lakh
Above Rs.5 lakh - Rs.7.50 lakh	10% of the total income
Rs 7.5 lakh - Rs 10.00 lakh	15% of the total income
Rs 10.00 lakhs - Rs 12.50 lakh	20% of the total income
Rs 12.5 lakhs - Rs 15.00 lakh	25% of the total income
Over Rs 15 lakhs	30% of the total income

"This will provide major relief to all tax payers in the new regime. An individual with an annual income of Rs 9 lakh will be required to pay only Rs 45,000/-. This is only 5 per cent of his or her income. It is a reduction of 25 per cent on what he or she is required to pay now, ie, Rs 60,000/-. Similarly, an individual with an income of Rs 15 lakh would be required to pay only Rs 1.5 lakh or 10 per cent of his or her income, a reduction of 20 per cent from the existing liability of Rs 1,87,500," the Finance Minister stated in her speech today.

"It is proposed to increase the rebate for the resident individual under the new regime so that they do not pay tax if their total income is up to Rs 7,00,000," she stated.

"The tax benefits have been tweaked to encourage individuals to move towards new tax regime, and to provide relief to middle class, while maximum marginal rate has also been reduced to 39% from 42.7% to give relief to the highest income strata. While the government is foregoing effective revenue of Rs350bn, this could have a consumption multiplier effect albeit at the margin, in the economy that's seeing fading consumption growth," says Madhavi Arora, Lead Economist, Emkay Global Financial Services.