Union Budget 2023-24 + FINANCE Bill, 2023

The rates provided in sub-section (1A) of section 115BAC of the Act shall be applicable, as default, for determining the income-tax payable in respect of the total income for FY 2023-24 (AY 2024-25), of an individual or Hindu undivided family or association of persons [other than a co-operative society], or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2. These rates are given in the following table.

Sl. No.	Total income	Rate of tax
(1)	(2)	(3)
1.	Upto Rs. 3,00,000	Nil
2.	From Rs. 3,00,001 to Rs. 6,00,000	5 per cent.
3.	From Rs. 6,00,001 to Rs.9,00,000	10 per cent.
4.	From Rs. 9,00,001 to Rs. 12,00,000	15 per cent.
5.	From Rs. 12,00,001 to Rs. 15,00,000	20 per cent.
6.	Above Rs. 15,00,000	30 per cent.

2. However, if such person exercises the option under the proposed sub-section (6) of section 115BAC of the Act, the rates as provided in Part III of the First Schedule shall be applicable.

3. Paragraph A of Part-III of First Schedule to the Bill provides following rates of income-tax:-

(i) The rates of income-tax in the case of every individual (other than those mentioned in (ii) and (iii) below) or HUF or every association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act (not being a case to which any other Paragraph of Part III applies) are as under:-

Upto Rs.2,50,000	Nil.
Rs. 2,50,001 to Rs.5,00,000	5%
Rs. 5,00,001 to Rs.10,00,000	20%
Above Rs10,00,000	30%

(ii) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year,-

Upto Rs.3,00,000	Nil.
Rs. 3,00,001 to Rs.5,00,000	5%
Rs. 5,00,001 to Rs.10,00,000	20%
Above Rs10,00,000	30%

(iii) in the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the previous year,-

Upto Rs.5,00,000	Nil.
Rs. 5,00,001 to Rs.10,00,000	20%
Above Rs10,00,000	30%

4. The amount of income-tax computed in accordance with the preceding provisions of this Paragraph (including capital gains under section 111A, 112 and 112A), shall be increased by a surcharge at the rate of,-

(a) having a total income (including the income by way of dividend or income under the provisions of sections 111A, 112 and 112A of the Act) exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of 10% of such income-tax;

(b) having a total income (including the income by way of dividend or income under the provisions of sections 111A, 112 and 112A of the Act) exceeding one crore rupees, at the rate of 15% of such income-tax;

(c) having a total income (excluding the income by way of dividend or income under the provisions of sections 111A, 112 and 112A of the Act) exceeding two crore rupees but not exceeding five crore rupees, at the rate of 25% of such income-tax;

(d) having a total income (excluding the income by way of dividend or income under the provisions of sections 111A, 112 and 112A of the Act) exceeding five crore rupees, at the rate of 37% of such income-tax;

(e) having a total income (including the income by way of dividend or income under the provisions of section 111A, 112 and section 112A of the Act) exceeding two crore rupees, but is not covered under clauses (c) and (d), shall be applicable at the rate of 15% of such income-tax:

4.1 Provided that in case where the total income includes any income by way of dividend or income chargeable under section 111A, section 112 and section 112A of the Act, the rate of surcharge on the amount of income-tax computed in respect of that part of income shall not exceed fifteen percent.

4.2 Provided further that in case of an association of persons consisting of only companies as its members, the rate of surcharge on the amount of income-tax shall not exceed fifteen per cent.

4.3 Further, for person whose income is chargeable to tax under sub-section (1A) of section115BAC of the Act, the surcharge at the rate 37% on the income or aggregate of income of such person (excluding the income by way of dividend or income under the provisions of sections 111A, 112 and 112A of the Act) exceeding five crore rupees shall not be applicable. In such cases the surcharge shall be restricted to 25%. Further, in case of such persons, the surcharge on income chargeable to tax under Chapter XII or Chapter XII-A shall also be restricted to 25%.

5. Marginal relief is provided in cases of surcharge.

 

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Full Text:

Union Budget 2023-24 + FINANCE Bill, 2023

New Default Tax Regime: revised slab rates apply for individuals and HUFs, with optional alternative regime and surcharge caps. Default tax rates under section 115BAC(1A) govern income-tax computation for individuals, HUFs, AOPs, BOIs and specified artificial juridical persons for FY 2023-24, with a progressive slab structure; taxpayers may opt under proposed section 115BAC(6) to instead be taxed under the alternative rates in Part III, which set different exemption limits for ordinary residents and senior citizens. The Bill includes a graduated surcharge regime for higher incomes, provides caps on surcharge where income includes dividends or specified capital gains, limits surcharge for AOPs consisting only of companies, and restricts surcharge rates for persons taxed under section 115BAC(1A); marginal relief is provided at surcharge thresholds.