Higher Income Tax Rates Applicable from July 1, 2023
The recently amended Finance Bill 2023 has introduced new income tax slabs for the salaried class, bringing changes to the tax rates effective from July 1, 2023. Under these revised slabs, a higher rate of income tax will be applicable for individuals whose annual taxable income exceeds Rs. 2,400,000. Let’s explore the updated tax rates for different income brackets:
Income Tax Slabs for Salaried Class:
- Taxable Income not exceeding Rs. 600,000: 0% Tax Rate
- Individuals falling within this bracket will continue to enjoy a 0% tax rate, which remains unchanged.
- Taxable Income exceeding Rs. 600,000 but not exceeding Rs. 1,200,000: 2.5% of the amount exceeding Rs. 600,000
- Individuals falling within this income range will be subject to a tax rate of 2.5% on the amount exceeding Rs. 600,000.
- Taxable Income exceeding Rs. 1,200,000 but not exceeding Rs. 2,400,000: Rs. 15,000 + 12.5% of the amount exceeding Rs. 1,200,000
- For those with a taxable income falling between Rs. 1,200,000 and Rs. 2,400,000, the tax rate remains unchanged at Rs. 15,000 plus 12.5% of the amount exceeding Rs. 1,200,000.
- Taxable Income exceeding Rs. 2,400,000 but not exceeding Rs. 3,600,000: Rs. 165,000 + 22.5% of the amount exceeding Rs. 2,400,000
- Individuals with taxable income in the range of Rs. 2,400,000 to Rs. 3,600,000 will be subject to a tax rate of Rs. 165,000 plus 22.5% of the amount exceeding Rs. 2,400,000.
- Taxable Income exceeding Rs. 3,600,000 but not exceeding Rs. 6,000,000: Rs. 405,000 + 27.5% of the amount exceeding Rs. 3,600,000
- Those falling within the income bracket of Rs. 3,600,000 to Rs. 6,000,000 will face a tax rate of Rs. 405,000 plus 27.5% of the amount exceeding Rs. 3,600,000.
- Taxable Income exceeding Rs. 6,000,000: Rs. 1,095,000 + 35% of the amount exceeding Rs. 6,000,000
- Individuals with a taxable income exceeding Rs. 6,000,000 will be subject to a tax rate of Rs. 1,095,000 plus 35% of the amount exceeding Rs. 6,000,000.
| Sr # | Taxable Income Range | Rate of Tax |
|---|---|---|
| 1 | Up to Rs. 600,000 | 0% |
| 2 | Exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 | 2.5% of the amount exceeding Rs. 600,000 |
| 3 | Exceeds Rs. 1,200,000 but does not exceed Rs. 2,400,000 | Rs. 15,000 + 12.5% of the amount exceeding Rs. 1,200,000 |
| 4 | Exceeds Rs. 2,400,000 but does not exceed Rs. 3,600,000 | Rs. 165,000 + 22.5% of the amount exceeding Rs. 2,400,000 |
| 5 | Exceeds Rs. 3,600,000 but does not exceed Rs. 6,000,000 | Rs. 435,000 + 27.5% of the amount exceeding Rs. 3,600,000 |
| 6 | Exceeds Rs. 6,000,000 | Rs. 1,095,000 + 35% of the amount exceeding Rs. 6,000,000 |
Please refer to the following table for a summary of the revised income tax slabs:
Sr. No. Taxable Income Range Rate of Tax
- Markdown
Not exceeding Rs. 600,000 0% - Markdown
Rs. 600,000 - Rs. 1,200,000 2.5% exceeding Rs. 600,000 - Markdown
Rs. 1,200,000 - Rs. 2,400,000 Rs. 15
