Income Tax Above 10 Lakh

On 1st February 2023, the Government of India announced the Union Budget 2023, wherein the new income tax regime is revised along with many other taxes. An income tax is a direct tax that the government levies on the annual income of every individual in the country if their income exceeds the defined threshold. Income tax on 10 lakh income is taxable at 15% as per the current income tax slabs of FY 2022-23 (AY 2023-24).

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Let us walk through the income tax calculator on how much tax will be deducted for 10 lakhs income as per the new income tax slabs and old tax regime slabs.

What is Income Tax?

Primarily, every individual or entity earning money in India through any means has to make an obligatory contribution of their income to the Government of India, known as Income Tax. Income tax is a type of tax falling in the Direct Tax category of the income tax rules enforced by the Income Tax Department. 

Taxes are collected by countries for the development of their economies and growth in the standard of living of their citizens.

The various taxes charged by the Income Tax Department can be categorized broadly into the following categories:

  • Direct taxes

  • Indirect taxes

  • Other taxes

Here is the list of some taxes falling under the main taxation categories in India:

Taxes
Direct Taxes Indirect Taxes Other Taxes
Income Tax Sales Tax Property Tax
Gift Tax Value Added Tax (VAT) Entertainment Tax
Wealth Tax Goods & Services Tax (GST) Professional Tax
Securities Transaction Tax Octroi Duty Toll Tax
Capital Gains Tax Custom Duty Education Cess
Corporate Tax Service Tax Registration Fees

Income Tax Above 10 Lakhs

The new income tax slabs announced by the Government of India in the Union Budget 2023 define the tax liabilities levied on individuals or entities at the end of the financial year of 2023-24. Individuals with income above 10 lakhs but less than 12 lakhs are levied tax at 15%.

New Income Tax Slabs
(Rs. in Lakhs)
Income Tax Slab Rates
(Annual rates in %)
Rs. 0 lakhs- 3 lakhs 0%
Rs. 3 lakhs- 6 lakhs 5%
Rs. 6 lakhs- 9 lakhs 10%
Rs. 9 lakhs- 12 lakhs 15%
Rs. 12 lakhs- 15 lakhs 20%
Rs. 15 lakhs & Above 30%

Invest & Save upto ₹46,800 per annum in taxInvest & Save upto ₹46,800 per annum in tax

Old Income Tax Slabs for AY 2022-23

Here is a table that will help you understand the old regime tax slabs under both cases and the tax on 10 lakh income and above.

Income Tax Slab Old Tax Regime for FY 20-21 (AY 21-22) Previous Tax Regime for FY 21-22 (AY 22-23)
HUF, Resident Individuals & NRIs

(< 60 years of age)

HUF & Resident Individuals

(60-80 years of age)

HUF & Resident Individuals

(>80 years of age)

Applicable for All HUF & Resident Individuals
Up till Rs. 2.5 Lakhs 0 0 0 0
More than Rs. 2.5 lakhs till Rs. 3.00 lakhs 5% (rebate on tax under Section 87A) 5% (rebate on tax under Section 87A) 0 5% (rebate on tax under Section 87A)
More than Rs. 3.00 lakhs till Rs. 5.00 lakhs 5% (rebate on tax under Section 87A) 5% (rebate on tax under Section 87A) 5% (rebate on tax under Section 87A) 
More than Rs. 5.00 lakhs till Rs. 7.5 lakhs 20% 20% 20% 10%
More than Rs. 7.5 lakhs till Rs. 10.00 lakhs 20% 20% 20% 15%
More than Rs. 10.00 lakhs till Rs. 12.50 lakhs 30% 30% 30% 20%
More than Rs. 12.5 lakhs till Rs. 15.00 lakhs 30% 30% 30% 25%
Rs. 15 lakhs and above 30% 30% 30% 30%

New Income Tax Slab for 2022-23 Under the Union Budget 2023

The new income tax slab rate introduced on 1st February 2023 reduced the number of tax slabs and increased the tax exemption limits from Rs. 2.5 lakhs to Rs. 3 lakhs, and increased the tax rebate limits to Rs. 7 lakhs from Rs. 5 lakhs.

From AY 2020-21, the Government of India introduced an optional new tax regime u/S 115BAC. 

Income tax above 10 lakhs is taxable at the rate of 30% in the old tax regime, whereas the tax on 10 lakhs income up to Rs. 12 lakhs is taxed at a 15% rate. 

The old vs. new income tax regime slab rates for the taxpayer as per Union Budget 2023 is as follows:

Income Tax Slab Rates

(Annual rates in %)

Previous Income Tax Slabs

(Rs. in Lakhs)

New Income Tax Slabs

(Rs. in Lakhs)

0% Rs. 0 lakhs- 2.5 lakhs Rs. 0 lakhs- 3 lakhs
5% Rs. 2.5 lakhs- 5 lakhs Rs. 3 lakhs- 6 lakhs
10% Rs. 5 lakhs- 7.5 lakhs Rs. 6 lakhs- 9 lakhs
15% Rs. 7.5 lakhs-10 lakhs Rs. 9 lakhs- 12 lakhs
20% Rs. 10 lakhs- 12.5 lakhs Rs. 12 lakhs- 15 lakhs
25% Rs. 12.5 lakhs-15 lakhs NA
30% Rs. 15 lakhs & Above Rs. 15 lakhs & Above

Surcharge

A surcharge is a tax over the income tax payable for an assessee falling in the high-income bracket. 

Following are the income ranges for which the applicable surcharge rates are:

Assessment Year 2022-23
Income Range Surcharge
Rs. 50 Lakhs above but less than Rs. 1 Crore 10%
Rs. 1 Crore above but less than Rs. 2 Crores 15%
Rs. 2 Crores above but less than Rs. 5 Crores 25%
Rs. 5 crores above but less than Rs. 10 Crores 25%*
Rs. 10 Crores above 25%*

*Union Budget 2023 limits the highest surcharge rates @ 25% per annum.

Disclaimer: Policy bazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.

Income Tax on 10 Lakhs for Old Regime Vs. New Regime

The government allows the taxpayers to either opt for the old tax regime or the new tax regime will be applicable by default.

The new tax regime with a low tax rate is beneficial for taxpayers with an annual income of Rs. 12 lakhs and above. On the other hand, the old tax regime is considered better for lower and mid-level income earners, as one could claim various tax exemptions. However, these exemptions/ deductions are not allowed in the new income tax regime. 

The new tax regime increased the income limit for tax rebates to Rs. 7 lakhs and the standard deductions limit to Rs. 52,000. 

For better understanding, let us understand how much tax will be deducted for 10 lakhs income under both regimes.

Illustration of Tax on 10 Lakh Income

For example, Mr. Prateek has an annual salary of Rs. 10 lakhs. 

As per the old tax regime, the total investments made by him under Section 80C of the Income Tax Act, 1961, is Rs. 1,50,000 under the following options:

  • ELSS (Equity Linked Savings Scheme)

  • LIC premium

  • PF (Provident Fund)

  • Home loan principal instalment (Home loan interest of Rs. 75,000 has been paid by him in the financial year 2020 – 2021)

  • Mr. Prateek also purchased medical insurance of Rs. 28,000 in the name of himself and his spouse apart from the Section 80C investments.

Mr. Prateek can claim the above deductions if he opts for the old tax regime, whereas deductions are not allowed in the new tax regime. 

Let us understand the tax flow of Mr. Prateek in both tax regimes through a table:

Details Old Tax Regime New Tax Regime
Gross Income Rs. 10,00,000 Rs. 10,00,000
Deductions:
Under Section 80C 150,000
Under Section 80D 25,000
Under Section 24(b) 75,000
Total Taxable Income 750,000 1,000,000
Old Tax Slab Regime
Rs. 0 to 2.5 Lakh
Rs. 2.5 to 5 Lakh @ 5% 12,500 --
Rs. 5 to 7.5 Lakh @ 10% 25,000 --
New Tax Slab Regime
Rs. 0 to 3 lakh -- 0
Rs. 3 to 6 lakh @ 5% -- 15,000
Rs. 6 to 9 lakhs @ 10% -- 45,000
Rs. 9 lakhs to 10 lakhs @ 15% -- 15,000
Income Tax 37,500 75,000
Cess @ 4% 1,500 3,000
Total Tax Levied 39,000 78,000

Tax Exemptions Available under New Income Tax Regime

The new tax regime removes all the common tax exemptions available with the old tax regime. An individual can claim the following tax deductions if he does not opt for the previous tax regime:

  • Standard tax deductions up to Rs. 52,000 (earlier Rs. 50,000)

  • Tax rebate claim if income up to Rs. 7 lakhs (earlier Rs. 5 lakhs)

  • Deductions u/S 80CCD (2) of the Income Tax Act, 1961.

Deductions Available under Old Income Tax Regime

If you are curious to know how to save the tax for a salary above 10 lakhs, the following are the Sections of the Income Tax Act, 1961, available to taxpayers for tax deductions every financial year under the old income tax regime:

Sections Maximum Claim Limit
80 C Rs. 1,50,000
80 CCC Rs. 1,50,000
80 CCD Rs. 1,50,000 + additional exemption of Rs. 50,000 u/S 80CCD (1B) on the amount deposited in the NPS account.
80 CCF Rs. 20,000
80 CCG Regular Citizens: Rs. 25,000
Senior Citizens: Rs. 50,000
80 D Regular Citizens: Rs. 25,000
Senior Citizens: Rs. 50,000
80 DD Normal Disability: Rs. 75,000
Severe Disability: Rs. 1,25,000
80 DDB Senior Citizens: Rs. 1 lakh
Other than Senior Citizen: Rs. 40,000
80 E NO LIMIT for a maximum of 8 Years on the interest paid on the education loan.
80 EE Additional deduction of Rs. 50,000 annually on interest paid on home load
80 GG Rs. 5,000 monthly OR 25% of Adjusted Total Income, whichever is less
80 GGA 100% tax deduction depends on donation & eligibility. A maximum of Rs. 10,000 can be donated in cash.
80 GGB Depends on donation
80 GGC Depends on donation
80 IA No limit
80 IAB No limit
80 IB No limit
80 IC No limit
80 ID No limit
80 IE No limit
80 JJA First 5 years' profits
80 QQB Rs. 3 lakhs
80 RRB Rs. 3 lakhs
80 TTA Rs 10,000 per year
80 U Normal Disability: Rs. 75,000
Severe Disability: Rs. 1,25,000

Summing It Up!

The new income tax regime brings lots of hope for High Net-worth Individuals (HNIs) by lowering the applicable tax slab and surcharge rates. But, low-income taxpayers must deeply analyse the benefits of opting for the new tax slab rates, as the commonly availed tax exemptions won't be available to them now. The removal of tax deductions may significantly increase the overall income tax.

FAQ's

  • Is 10 lakh income tax-free?

    No, the tax on 10 lakh income is not tax-free. As per the new income tax structure, income between Rs.9 lakh to 12 lakh fall under the tax rates of 15% p.a.
  • How to avoid tax for 10 lakhs?

    To avoid income tax on 10 lakhs, one can claim tax deductions available with the individuals under the old tax regime. Previous income tax regimes offer the taxpayers to avail of tax exemptions under Section 80C, 80D, 80 GG, and more. The new tax regime removed these tax exemptions while lowering the tax slab rates.
  • How much amount of income is tax-free?

    As per the announcements made under Union Budget 2023, income up to Rs. 3 lakhs is tax-free, and income up to Rs. 7 lakhs can be claimed for tax rebates under Section 87A.
  • How much tax do I have to pay for 10 lakhs?

    Under the new tax slab rates, an individual earning 10 lakhs has to pay an income tax of Rs. 78,000, while under the old tax structure, they have to pay Rs. 39,000 only.

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