Income tax slab rates India FY 2024-25

What is Income Tax ?

Income tax is charged on all individuals and entities based on the rates set each year by the Annual Finance Act, the Income-tax Act, 1961, or both. For the Assessment Year 2024–25, the applicable tax rates are outlined in Section 2 of the Finance (No. 2) Act, 2024, along with Part I of its First Schedule.

The Schedule is divided into three main parts:

• Part I: Specifies the income-tax rates applicable on taxable income for AY 2024–25.
• Part II: Specifies the rates at which tax must be deducted at source (TDS) during the financial year 2024–25, under various provisions of the Income-tax Act, 1961.
• Part III:
  • Covers tax rates applicable in special cases,
  • Specifies TDS rates on income under the head “Salaries”,
  • Details how to compute advance tax for FY 2024–25 for taxpayers opting out of the default tax regime.

Additionally, Part III of the First Schedule to the Finance (No. 2) Act, 2024 will become Part I of the First Schedule to the Finance Act, 2025, and this pattern will continue in future Finance Acts

What is Surcharge ?

Surcharge is an extra tax charged in addition to income tax. It is calculated as a percentage of the income tax amount, not on the income itself.

Currently, surcharge is applied only when income exceeds certain thresholds, which vary for different types of taxpayers. As income increases beyond these thresholds, higher surcharge rates may apply.

However, under the special tax regimes for domestic companies and co-operative societies, a single, flat surcharge rate is applied—regardless of the total income.

What is Health and Education Cess ?

After calculating income tax and any applicable surcharge, an additional 4% is added as the Health and Education Cess. This cess is calculated on the total of income tax plus surcharge, if applicable.

The cess applies to all taxpayers, including:

• Individuals
• Hindu Undivided Families (HUFs)
• Associations of Persons (AOPs) / Bodies of Individuals (BOIs)
• Artificial Juridical Persons
• Firms
• Local Authorities
• Co-operative Societies
• Companies

This cess helps the Government fund its commitment to provide quality healthcare and universal access to basic, secondary, and higher education.

What are the Tax Rates for Individual / Hindu Undivided Family (HUF)/ Association of Persons (AOP)/ Body of Individuals (BOI)/ Artificial Juridical Person in india ?

Income tax and Surcharge on Individual / HUF Taxpayers

Individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), and Artificial Juridical Persons have two options for paying income tax:

1. Default Tax Regime (Section 115BAC):
   • Offers concessional (lower) tax rates.
   • To avail these rates, the taxpayer must give up certain exemptions and deductions (like HRA, 80C, etc.).Deduction under section 80CCD(2), 80CCH(2) or section 80JJAA is allowed under New Tax Regime.
2. Optional (Old) Tax Regime:
   • Allows the taxpayer to retain exemptions and deductions.
   • Taxes are calculated at regular rates specified in the Annual Finance Act of the relevant year.

Taxpayers can choose the regime that benefits them most, subject to conditions.

What are the Tax slab under New Tax Regime (Section 115BAC) For AY 2025-26 and FY 2024-25 ?

What are the Tax Slab Under Old Tax Regime or Optional Tax Regime For AY 2025-26 and FY 2024-25 ?

For a senior citizen (being a resident individual who is of the age of 60 years but not more than 80 years at any time during the previous year), the basic exemption limit is Rs. 3,00,000. Further, resident individuals of the age of 80 years or more at any time during the previous year, being very senior citizens, would be eligible for a higher basic exemption limit of Rs. 5,00,000.

What are the Tax Rates on Share Income, Short Term Cpital Gains, Long Term Capital Gains, Winning From Lottery Etc. For AY 2025-26 and FY 2024-2025 ?

The Income-tax Act, 1961 prescribes specific tax rates for certain types of income. These special tax rates apply regardless of the tax regime (whether the new/default or old/optional regime is chosen). The remaining income (after excluding these specially taxed components) is taxed using the applicable slab rates, and the basic exemption limit is applied only on that portion.

What Happened if We do not Disclose Income ? High Tax on Unexplained Income Under Sections 68 to 69D – 78% Effective Rate (AY 2025–26) ?

To prevent tax evasion and misuse of the basic exemption limit, the Income-tax Act imposes a heavily penal tax rate on unexplained income, which includes:

• Unaccounted cash or credits (Section 68)
• Unexplained investments or assets (Sections 69, 69A, 69B)
• Unexplained expenditure (Section 69C)
• Borrowings or repayments not recorded properly (Section 69D)

Key Provisions:

1. Tax Rate:
   • Such income is taxed at 60%, plus a 25% surcharge on the tax.
   • A 4% Health & Education cess is also levied on the total of tax + surcharge.
   • This brings the effective tax rate to 78%.
2. No Exemptions or Deductions:
   • Taxpayers cannot claim any basic exemption limit, deductions, or expenses on such income.
3. No Loss Set-Off:
   • Losses from any head of income (like business or capital loss) cannot be adjusted against income taxed under these sections.

This strict tax treatment is aimed at discouraging the use of black money and ensuring all income is properly disclosed.

What are the Income tax Slabs for Firm/ LLP/ Local Authority ?

Income Tax and Surcharge on Firm / LLP/ Local Authority

Overall, 30% of the total income is subject to tax. Additionally, special rates for capital gains as specified under sections 112, 112A, and 111A of the Income Tax Act are also applicable to firms, LLPs (Limited Liability Partnerships), and local authorities. Surcharge is applicable @12% if Total Income exceeds Rs. 1 crore.

What are the Income tax Slabs for  Co-operative Society?

A resident manufacturing co-operative society in India can choose to pay tax at lower rates under section 115BAE. Other resident co-operative societies in India can choose lower tax rates under section 115BAD..

What are the Income tax Slabs for Domestic Companies ?

Income Tax Slabs for Domestic Companies

If the total turnover or gross receipts in the previous year 2022–23 are less than or equal to ₹400 crore, the tax rate is 25% of the total income. In all other cases, the tax rate is 30% of the total income.

Surcharge For Domestic Companies

1. If the total income is more than ₹1 crore but does not exceed ₹10 crore, a surcharge of 7% is applied to the income tax calculated as per the applicable rates.
2. If the total income exceeds ₹10 crore, the surcharge increases to 12% of the calculated income tax.

What are the Income tax Slabs Foreign Companies ?

Income Tax on Foreign Companies

1. Royalties and fees for technical services (FTS) received from the Government or an Indian entity, under an agreement approved by the Central Government and entered into between April 1, 1961, and March 31, 1976 (for royalties), or between March 1, 1964, and March 31, 1976 (for FTS), are taxed at 50%.
2. All other income is taxed at 35%.

Surcharge on Foreign Companies

1. If the total income is more than ₹1 crore but does not exceed ₹10 crore, a surcharge of 2% is applied to the income tax calculated as per the applicable rates.
2. If the total income exceeds ₹10 crore, the surcharge increases to 5% of the calculated income tax.

Marginal Relief is available In All Cases. The purpose of marginal relief is to ensure that the increase in amount of tax payable (including surcharge) due to increase in total income of an assessee beyond the prescribed limit should not exceed the amount of increase in total income.