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Income tax is a type of direct tax, which means that it is directly paid to the government by the taxpayer. It is based on the taxpayer's income and is calculated using the tax slabs defined by the Income Tax Department.

Note: Rebate limit of Personal Income Tax to be increased to Rs. 7 lakh from the current Rs. 5 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to Rs. 7 lakh to not pay any tax.

New Income Tax Slabs (FY 2023-24): An Illustrative Analysis

New tax slabs


Tax Rate

Up to Rs 3 lakh


Above Rs 3 lakh and up to Rs 6 lakh

5% on income over Rs 3 lakh

Above Rs 6 lakh and up to Rs 9 lakh

Rs 15000 + 10% on income over Rs 6 lakh

Above Rs 9 lakh and up to Rs 12 lakh

Rs 45000 + 15% on income over Rs 9 lakh

Above Rs 12 lakh and up to Rs 15 lakh

Rs 90000 + 20% on income over Rs 12 lakh

Above Rs 15 lakh

Rs 150000 + 30% on income over Rs 15 lakh


Let us take an example to understand the current tax slabs

Rohit is a salaried person with a basic of Rs 1,20,000 per month. HRA of Rs 52,000 per month. Special Allowance of Rs 18,000 per month. LTA of Rs 20,000 annually and pays a rent of Rs 40,000. He has income from other sources like FD interest 20000 respectively.




Income from Salary


Basic Salary (1,20,000 * 12)



HRA (52,000 * 12)



Special Allowance (18000 * 12)



LTA (20,000 annually)



Less: Standard Deduction



Total Income from Salary



Add: Income from Other Sources FD Interest 20,000



Gross Total Income



Income Tax [1,50,000 + (2270000 - 1500000) * 30%]



Add: Cess @4% on 3,81,000



Total Income Tax


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Published by

Chetan Chauhan
(Chartered Accountant)
Category Income Tax   Report

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