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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in Tax under section 80 CLet 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.
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 |
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% |
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) | 0 | 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% |
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 |
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.
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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.
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 |
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.
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 |
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.
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
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