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Learn about income tax slabs in India - old and new tax regime. Maximize tax savings with right investments. FAQs included. Read now.

Understanding Income Tax Slabs in India: Old vs New Regime, Rates and Investments

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"Understanding Income Tax Slabs in India: Old vs New Regime, Rates and Investments"

Pranav Karnad

From budgeting to expenses management and everything in between

<p>Whether you earn salaried income or are self-employed, you will have to pay income tax if you have any taxable income. In case your total income does not exceed the basic exemption limit, you will not have to worry about paying taxes or even filing your income tax returns in certain cases. To understand your tax liability and your ITR filing requirements, you need to first be aware of the current income tax slabs in India.</p><h2><strong>A Closer Look at Income Tax Slabs: What Are They and Why Do They Matter?&nbsp;</strong></h2><p>In India, income tax is the most predominant direct tax levied by the government. It is governed by the provisions of the Income Tax Act, of 1961, according to which individual taxpayers need to pay income tax based on a slab system. As per this system, different income slabs carry different rates of income tax.</p><p>The slabs may vary according to the age of the taxpayer. Currently, India has two tax regimes in force — the old tax regime and the new tax regime (introduced in the Union Budget 2020, w.e.f April 1, 2020). It is important to know what the current tax slab is and which slab applies to you, so you can use this information in your tax planning exercise.</p><h2><strong>Current Income Tax Slabs in India (New Tax Regime)&nbsp;</strong></h2><p>The new tax regime is more recent. It offers the advantage of lower tax rates, but it does not allow for many of the deductions available in the old tax regime. The current income tax slabs in India as per the new tax regime for AY 2023-24 are tabulated below.</p><h2><strong>Maximise Your Tax Savings with the Right Investments&nbsp;</strong></h2><p>The new tax regime offers lower rates of tax than the old regime. However, the old regime gives you the benefit of various tax deductions. If you want to optimise your tax savings, you can either choose lower tax rates in the new regime or invest in the right assets to get the benefit of tax deductions in the old regime. One such asset that offers tax benefits is the Equity Linked Savings Scheme (ELSS).</p><p>Looking to grow your wealth and save tax? Say goodbye to FDs and hello to mutual fund investments with Fi Money! With over 900 active funds, a user-friendly interface, and EpiFi Wealth's expertise, investing has never been easier. And with zero penalties for missed payments, you can invest stress-free. Still feeling lost? Check out our Collections, designed to suit all kinds of investors.</p><h2><strong>Frequently asked questions&nbsp;</strong></h2><h3><strong>What are the new tax slabs?&nbsp;</strong></h3><p>The new tax slabs are essentially the income tax slabs specified in the new tax regime in India. According to the current income tax slabs for AY 2023-24 in the new regime, income up to Rs. 2.5 lakhs is tax-free. Thereafter, the income tax rates increase from 5% to 30% for different slabs of income.</p><h3><strong>How can I reduce my income tax?&nbsp;</strong></h3><p>You can reduce your income tax liability by investing in tax-saving schemes and assets. You can also claim certain expenses such as life insurance premiums, health insurance premiums and home loan EMIs as deductions from your total income under the old tax regime.</p><p>Alternatively, you can opt for the new tax regime to get the benefit of lower tax rates if you do not have any tax-saving investments or expenses.</p>

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