INCOME TAX RATES FOR FY 2024-25
INCOME TAX RATES / SLABS
for FY 2024-25
The Article on " TAX PLANNING FOR FY 2024-25 CONTAINS 5 PARTS
PART I : MAJOR CHANGES IN TAX RULES FOR FY 2024-25 CLICK HERE
PART 2 : TAX SLABS /RATES FOR FY 2024-25 READ THIS PART BELOW
PART 3 : TAX REBATES ,POPULAR TAX SAVING PLANS FOR FY 24-25 CLICK HERE
PART 4 : INCOME TAX CALCULATOR FOR FY 2024-25 CLICK HERE
PART 5 : TAX ON RETIREMENT BENEFITS CLICK HERE
HOW TO PAY INCOME TAX ONLINE ? CLICK HERE
TO KNOW ALL ABOUT TDS RATES , CLICK HERE
PART 2 - INCOME TAX SLABS AND RATES FOR FY 2024-25
TAX SLABS IN NEW REGIME FOR FY 2024-25
INCOME RANGE
INCOME TAX
.Up to Rs 3,00,000
Rs 3,00,001 to Rs 7,00,000
Rs 7,00,001 to Rs 10,00,000
Rs 10,00,001 to Rs 12,00,000
Rs 12,00,001 to Rs 15,00,000
Above Rs 15,00,000
NIL
5%
10%
15%
20%
30%
If you do not opt for new simplified tax regime and want to retain old tax structure and avail tax rebates prevalent in FY 2019-20 , The tax structure / slab will continue as below :
TAX SLABS IN OLD REGIME FOR FY 2023-24
INCOME RANGE
General Citizens
Persons above 60 years and below 80 years
Persons above 80 years
Up to Rs 2,50,000
Rs 2,50,001 to Rs 3,00,000
Rs 3,00,001 to Rs 5,00,000
Rs 5,00,001 to Rs 10,00,000
Above Rs 10,00,000
NIL
5%
5%
20%
30%
NIL
NIL
5%
20%
30%
NIL
NIL
NIL
20%
30%
1. Surcharge of 10 % for income between Rs 50,00,000 to Rs 1 Crore and surcharge of 15% on income above Rs 1 .00 crore .Surcharge at the rate of 25% of such tax,where total income exceeds Rs 2 crores to Rs 5 crores rupee . A surcharge at the rate of 37% of tax, where total income exceeds Rs 5 crores under the old tax regime (Since FM had announced that enhanced cess on income over Rs 2 crores will not be applicable for capital gains out of sale of Equities,MF etc) For FY 2023-24 , UNDER NEW TAX REGIME the highest surcharge rate is reduced from 37 per cent to 25 per cent in the new tax regime.
2. Education cess of 4% on Tax+ Surcharge
3. Tax rebate under Section 87A of IT Act up to Rs 12,500 for Resident individuals with income less than Rs.5 lakhs under old tax regime and Tax rebate of Rs 25,000 up to Rs 7.00 lakhs in the new tax regime
TAX ON INTEREST INCOME
.Savings Bank Accounts : Tax free up to Rs 10,000 per year under old regime only
2.Tax on Fixed Deposits : Fully taxable
3.Recurring Deposits : Fully taxable
4.Tax Saving FDs : Fully taxable
5.National savings Certificates : Fully taxable
6.Kisan Vikas Patra : Fully taxable
7.Senior Citizens savings Scheme : Fully taxable
8.Public Provident Fund : Tax Free under old regime only
9.Tax Free Bonds : Tax Free
10.Sukanya Samruddhi Yojana : Tax Free under old regime only
Note :
1. Tax exemption limit is Rs 50,000 for interest on bank deposits / postal deposits for senior citizens who opt for old Tax Regime .
2. Tax rebate under Section 87 A is allowed up to an income of Rs 7. lakhs under new tax regime
3. Standard Deduction of Rs 50,000 allowed on salaries / pensions in the old regime and Rs 75,000 in the new regime
TAX ON STOCK MARKET TRANSACTIONS
1. Profits made out of short term stock holding (for less than a year ) attracts income tax at the rate of 20 % .
2. Short term loss on one stock can be offset by short term gain on another stock
3. Stocks held for more than 12 months are eligible for Long Term Capital Gain and hence profits are tax free up to Rs 1.25 lakh only Long Term Capital Gain ( LTCG ) is taxed at 12.5 % beyond Rs 1.25 lakh .
Long Term Capital Gain Tax on sale of equity shares and equity oriented mutual funds is at 12.5 % ,flat and uniform rate for gains more than Rs 125,000 in the financial year . Further no indexation is allowed for calculating the gain . However gains earned up to January 31,2018 will be allowed to grandfathered.Grandfathering is allowing of existing benefits for the previous period . Hence Long Term Profits earned after February 1, 2018 will only be taxed if profits are booked in the financial year 2018-19 i.e from 01.04.2018 to 31.03.2019 .The higher of the purchase price of share or mutual fund or the price as on 31.01.2018 for equity and NAV as on 31.01.2018 for mutual fund will be taken as investment cost for arriving the long term gain .
4. Dividend Distribution Tax is abolished from the Financial Year 2020-21. However Dividend income is to be added to his / her personal income by the receiver of the dividend .
5. Short term losses can be carried forward for 8 years only if you declare the same in your Income Tax returns before due date .
6. Trading in derivatives attract Business tax .
7. Losses made out of stocks held for more than 12 months cannot be offset for Short term gains .
TAX ON MUTUAL FUND PROFITS
1. For Tax purpose , a Mutual fund that invests more than 65% in equities is classified as Equity Funds .
2. Diversified funds and arbitrage funds are also considered Equity Funds .
3. Profits on Equity funds held less than 12 months is considered as Short term Capital Gain and to be included in the taxable income. Short Term Capital Gain attracts a tax of 15 %
4. Profits on Equity Funds held for more than 12 months is considered as Long term Capital Gain and is exempted from tax up to Rs 1.25 lakh only . Long Term Capital Gain ( LTCG ) is taxed at 12.5 % beyond Rs 1.25 lakh .
5. Profit on Debt Funds are considered Long Term , if held for more than 2 years .
6. Tax on Long Term Capital gain on debt Funds is 12.5 % .
7. Short Term Debt Funds for debt funds sold within 2 years is to be added to the taxable income and will be taxed according to slab
8. Dividends on Mutual funds are tax free ,as Mutual Fund Houses would have paid Dividend Distribution Tax ,currently at 28.84%
TAX ON INSURANCE POLICIES
Under 80 C of Income tax Act , life insurance premia paid on life insurance policies is one of the eligible instruments for total tax exemption up to Rs 1,50,000 only . However be cautious and confirm with policy issuers whether the contribution made to the particular policy is eligible for such exemption . The reason is there are riders for contributions made to be eligible for exemption .
As per Income tax law , Quote ; " Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section 80 C.Payment of premium which is in excess of 10 percent (if policy is issued on or after 1-4-2013 , 15 % in case of insurance on life of person with disability referred to in section 80U or suffering from disease or ailment specified in section 80 DDB/ rule 11DD)of actual capital sum assured shall not be included in gross qualifying amount .The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise,over the sum actually assured , which is to be or may be received under the policy by any person ,shall not be taken in to account for the purpose of calculating the actual capital sum assured .The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.
With effect from 1-4-2013, 'actual capital sum assured' in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account-
(i) the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person. "unquote"
For full page of Income tax website relevant to the above rule , CLICK HERE
Hence premiere paid one time premium policies may not be eligible to qualify for exemption as the insured amount may not be ten times the premium .Further amount received under those policies may be treated as Taxable Income and tax calculated. Hence double check with insurance companies before purchasing as selling agents may not reveal you correctly .
ADVANCE TAX
Under Section 208 of Income-tax Act, every assesses is required to pay advance tax if the tax liability for the previous year exceeds ten thousand rupees.The Tax payable during the financial year itself is called Advance Tax. For individuals with salary as sole source of income,TDS is to deducted by the employer during disbursal of salary and hence question of paying advance tax separately may not arise.
ADVANCE TAX CALENDAR / DUE DATE SCHEDULE FOR BOTH INDIVIDUALS AND CORPORATEDUE DATE
ADVANCE TAX PAYABLE
Before 15th June 2024 15% of advance tax
Before 15th Sept 2024 45% of advance tax Less advance tax already paid
Before 15th Dec 2024 75% of advance tax Less advance tax already paid
Before 15th March 2025 100 % of advance tax Less advance tax already paid
A Resident senior Citizen is exempted from paying advance tax , if he has no income from business or profession . He can discharge his tax liability by paying self-assessment tax .
THIS ARTICLE CARRIES INFORMATION ON VARIOUS TAX PROVISIONS WHICH ARE GENERALLY USEFUL .YET IT DOES NOT CARRY ALL THE PROVISIONS AND HENCE YOU ARE ADVISED TO GO THROUGH INCOME TAX DEPARTMENT WEBSITES FOR AUTHENTIC COMPLETE INFORMATION ,ESPECIALLY FOR THOSE WHO HAVE GOT MULTIPLE STREAMS OF INCOME OR COMPLEX INVESTMENTS .YOU MAY ALSO CONSULT A QUALIFIED TAX CONSULTANT / CHARTERED ACCOUNTANT FOR ANY CLARIFICATION. READERS ARE ALSO WELCOME TO SEND FEEDBACK , FORM AVAILABLE BELOW. WE ARE OPEN FOR CORRECTION IF NEEDED