The Indian income tax rate remains mostly unchanged for the financial year 2023-24 (assessment year 2024-25). The income threshold for each bracket under alternate tax regime is adjusted slightly this year.
A salaried individual is taxed on his/her taxable income as per the income tax slab rates applicable.
Taxable income is the amount on which how much tax you owe to the government of India is calculated for a given financial year. Taxable income is calculated after taking out tax deductions allowed under section 80C to 80U from gross total income.
In other words, taxable income is any income that you earn during the tax year.
How Wages and Salaries Are Taxed in India
For instance taxable income for the financial year 2023-24 (assessment year 2024-25) is the income that you earned during the period starting from 01/04/2023 to 31/03/2024.
Which means taxable income includes salary, income from house property, profits and gains from business or profession and all other income taxable in India.
Income tax brackets for salaried individuals
Salary is the most common type of income that is taxable in India. It includes wages, salary, bonus and all other fees paid by employer to employee.
At present in India, we have 3 tax brackets under the old regime and seven tax brackets under the alternate tax regime.
For salaried individuals, the top income tax rate for the financial year 2023-24 is 30% except for capital gains and certain specified incomes.
Here are the income tax slab rates applicable to a salaried individual for the financial year 2023-24 (assessment year 2024-25) under new alternate tax regime as per section 115BAC.
| Income tax slab (in INR) | Income Tax Rates for the financial year 2023-24 (AY 2024-25) Applicable to an individual as per the new regime |
| Up to 3,00,000 | Nil |
| 3,00,001 to 6,00,000 | 5% |
| 6,00,001 to 9,00,000 | 10% |
| 9,00,001 to 12,00,000 | 15% |
| 12,00,0001 to 15,00,000 | 20% |
| Above 15,00,000 | 30% |
If you have opted to pay taxes as per the old tax regime for the financial year 2023-24 (AY 2024-25), then here are the income tax slab rates.
| Income slabs in INR | Individuals below 60 years of age | Individuals between 60 years and 80 years of age | Individuals above 80 years of age |
| Up to 2,50,000 | Nil | Nil | Nil |
| 2,50,001 to 3,00,000 | 5% | Nil | Nil |
| 3,00,001 to 5,00,000 | 5% | 5% | Nil |
| 5,00,001 to 10,00,000 | 20% | 20% | 20% |
| Above 10,00,000 | 30% | 30% | 30% |
Cess and surcharge on income tax
An individual is liable to pay health and education cess for the financial year 2023-24 (AY 2024-25) at the rate of 4% on income tax.
It should be added to your income tax if you are liable to pay tax for the financial year. If for a financial year your tax liability is nil, then obviously health and education cess will be calculated as nil.
Surcharge is applicable if income for the financial year is above Rs 50 lakhs. Here are the surcharge rates applicable to a salaried individual for the financial year 2023-24 (AY 2024-25).
| Income | Surcharge rate |
| Above 50 lakhs | 10% |
| Above 1 crore | 15% |
| Above 2 Crore | 25% |
| Above 5 crore | 37% |
Marginal relief for surcharge is available.
Also Read: Income tax slab rates for the financial year 2023-24 (AY 2024-25)
Tax rebate under section 87A
As a salaried individual you can claim tax rebate from your income tax liability for the financial year 2023-24.
If your taxable income does not exceed 5,00,000 rupees and you have opted for the old tax regime, then you can claim tax rebate under section 87A up to a maximum limit of 12,500 rupees.
For individuals opting to pay tax as per alternative tax regime under section 115BAC, the taxable income limit is 7,00,000 rupees instead of 5,00,000 rupees. It is applicable from the financial year 2023-24 (AY 2024-25). As per this change, a resident salaried individual who has opted to pay tax under the new tax regime is eligible for tax rebate under section 87A up to an amount of 25,000 rupees for the financial year 2023-24 (AY 2024-25).
Recommended Read: How to get Income tax rebate up to Rs 25,000 U/S 87A
TDS on salary: Why does the employer deduct tax from your salary income?
As per our tax laws, your employer will be deducting tax every month from your salary income if you are liable to pay taxes in India.
It’s the responsibility of the employer to collect and pay taxes on behalf of the employee to the government. Therefore, taxes will be deducted based on data provided by you.
At the end of the year, your employer will send you form-16 with all the details of tax deducted and deposited against your PAN. It’s also referred to as a TDS certificate.
How to submit a tax declaration to your employer?
Almost all employers are taking tax declarations online. They must have a mechanism where at the beginning of the year, all the employees are required to submit their tax declaration. Check with your HR to know more on this.
In tax declaration, you need to submit your investment details, other income if any and house property losses. Based on this tax declaration tax will be deducted every month from your salary.
Towards the end of the year, your employer will ask you to submit all investment proof to match with the tax declaration. If it’s not matching or they are not satisfied, then your deduction or expenses might be disallowed.
What is form 16 and when should I receive it?
Form 16 is a TDS certificate issued by an employer to employees. Form 16 will have all the details of tax deducted, deposited, PAN and TAN of the employer with address and all other details to help you file your income tax return.
The last date to issue form 16 by the employer to the employee is 31st May of the assessment year. For the financial year 2023-24 (AY 2024-25), the last date to issue form 16 is 31st May 2024.
How to check how much tax an employer has deducted from salary income?
You need not wait for form 16. You can check tax deduction and other details from form 26AS and AIS available on income tax portal.
You can login to the income tax efiling services portal and access these forms to know how much tax has been deducted and deposited to your account. If you find any kind of mismatch, then take up this matter with your employer. Your employer can correct their TDS return any time if they want to.
Which Income tax return forms to be filed by salaried individuals?
We have four income tax return forms applicable to salaried individuals. Most salaried individuals are covered in ITR-1.
ITR1, which is also known as sahaj, is a very simple income tax return which can be filed online at income tax efiling site with the help of form 16. We have a different article on income tax return forms (ITR). You are requested to go through that to know which income tax form to be selected.
Due date of filing income tax return
A salaried individual required to file his/her income tax return on or before the due date of filing. For the financial year 2023-24 (AY 2024-25), the due date of filing is 31st July 2024.
Salaried individuals having business income are required to file their tax return on or before 31st October of the financial year if their accounts are required to be audited by a chartered accountant in practice.
If your accounts for the financial year 2023-24 (AY 2024-25) are required to be audited by a chartered accountant in practice, then the due date of filing income tax return is 31st October 2024.
In case you missed the due date of filing, then the return can be filed by paying late filing fee on or before 31st December 2024. In this case, your income tax return will be considered as a belated return.
In case of any mistakes, you can revise your income tax return for the financial year 2023-24 on or before 31st December 2024.
When should a salaried individual file the income tax return?
Salaried individuals are required to file their income tax return if their gross total income is above the basic exemption limit.
We have written an article on When should a salaried employee file an income tax return in India?. You are required to read that to have more clarity.
In following cases, a salaried individual is also required to file his/her income tax return irrespective of his/her gross total income.
- When you have spent Rs 2 lakhs or more in a financial year for travel to a foreign country;
- Deposited amount for the financial year exceeds 1 Crore INR in current account maintained with a bank;
- Electricity bill exceeds 1 lakh INR;
- Income from foreign countries;
- Holding assets in foreign countries;
- Deposited 50 lakhs or more in a financial year in a saving bank account;
- TDS or TCS exceeds Rs 25,000 or more in a financial year;
- Claiming tax refund.
How to file the income tax return after the due date of filing?
The process of filing an income tax return after the due date is the same. You need to choose the income tax return form online, fill it up with all your income details and other things before submitting it online.
We suggest you choose the income tax e-filing services to file your income tax return instead of private online tax filing portals.
You need to pay a late fee for delay in filing your income tax return.
Why to Check AIS and form 26AS
Before filing your income tax return, you need to check your AIS and form 26AS thoroughly.
We have seen cases where AIS and form 26AS reports additional income which the assessee has not taken to income tax return. In few other cases, the figure shown in AIS and form 26AS is not matching with the assessee’s income tax return. Therefore, a reconciliation is a must before filing your income tax return.
You can access AIS and form 26AS online from the income tax efiling portal by logging in with your user ID and password.
Frequently asked questions-FAQs
How much do you have to make to file taxes?
You need to make at least the amount of your basic exemption limit in order to file taxes.
If you have opted to pay taxes as per the old tax regime, then the basic exemption limit is 2.5 Lakhs rupees. In case of the new tax regime as per section 115BAC, the basic exemption limit will be 3 lakhs rupees.
Beloe this basic exemption limit you need not file taxes. If your income is above the basic exemption limit, then you must file your income tax return.
How can I reduce my income taxes?
There are many ways to reduce your income taxes through deductions and rebates. You can invest in tax saving investments in order to reduce your income below the taxable limit. Talk to your tax consultant at the beginning of the financial year to help you in maximizing your tax deduction for the year.
