Tax rates/slabs under New Tax Regime and tax rebate under section 87A of the Income Tax Act, 1961

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Anubhav Singh

7 Points Joined May 2019

Tax rates/slabs under New Tax Regime for FY 2023-2024 and tax rebate under section 87A of the Income Tax Act, 1961

There are two things: (net) income and (net) taxable income. Net taxable income is obtained after various deductions and exemptions from net income (like deductions and exemptions obtained using investment in mutual funds, fixed deposits, insurance, pension, etc.)

Under the new tax regime, people with net taxable income below 7 lacs are not supposed to pay any income tax. But according to the new tax regime slabs, the people with net income between 3 to 6 lacs are supposed to pay 5 percent of their income as tax. How is it possible?

Replies (2)

NARENDRA

ACCOUNTS MANAGER

2193 Points Joined December 2012

If your income is more than 7 Lakhs then the system calculates 5% tax up to 3-6, up above from it & less than 9 lac then 10% will be applied.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

208350 Points Joined July 2016

The tax rate for all individual (below 60 years) will be same be your income below 7 lakhs or above 7 lakhs. i.e. tax rate for 3-6 lakhs is 5% and 6-9 lakhs is 10%.

But rebate u/s. 87A will apply for individuals upto 7 lakhs net taxable income. (which is maximum upto Rs. 25000/-)

If your income is above 7 lakhs the rebate will not be applicable, and hence you have to pay total tax calculated as per said slab rate, off course, after considering marginal relief.