The New Tax Regime, also known as the Alternative Tax Regime, is an optional choice for the Assessment Year 2023-24. Individuals or Hindu Undivided Families (HUF) looking to benefit from this regime must refer to Section 115BAC(5). However, from the Assessment Year 2024-25 onwards, this regime will become the default for both individuals and HUFs.
Furthermore, the benefits of the new tax regime have been extended to Associations of Persons (AOP), Bodies of Individuals (BOI), and Artificial Juridical Persons (AJP) starting from the Assessment Year 2024-25 onwards.
For those who wish to opt out of the new default tax regime, they must reference Section 115BAC(6).
Income Tax Rates
Income tax rates under new tax regime for Individuals, HUFs, AOPs, BOIs & AJPs in respect of AY 2023-24 and 2024-25 are as under:
AY 2023-24: Individuals & HUFs
| Taxable Income Slabs (Rs) | Tax Rates |
| Upto 2.5 lac | Nil |
| Above 2.5 lac but upto 5 lac | 5% |
| Above 5 lac but upto 7.5 lac | 10% |
| Above 7.5 lac but upto 10 lac | 15% |
| Above 10 lac but upto 12.5 lac | 20% |
| Above 12.5 lac but upto 15 lac | 25% |
| Above 15 lac | 30% |
AY 2024-25: Individuals, HUFs, AOPs, BOIs & AJPs
| Taxable Income Slabs (Rs) | Tax Rates |
| Upto 3 lac | Nil |
| Above 3 lac but upto 6 lac | 5% |
| Above 6 lac but upto 9 lac | 10% |
| Above 9 lac but upto 12 lac | 15% |
| Above 12 lac but upto 15 lac | 20% |
| Above 15 lac | 30% |
Surcharge Rates
A surcharge of 10%, 15%, 25%, or 37% is applicable in cases where total income exceeds Rs 50 lacs, Rs 1 crore, Rs 2 crore, or Rs 5 crore respectively, subject to provisions relating to marginal relief, shall be applicable, further subject to:
i) The surcharge rates of 25% & 37% shall not be used in the case of dividend income or income chargeable to tax under sections 111A, 112, 112A and 115AD(1)(b), where the maximum rate of surcharge shall remain capped at 15%.
ii) The surcharge rate in the case of an AOP with all members as a company, shall be capped at 15%.
However, enhanced surcharge rate of 37% is not applicable for assessees under new tax regime from AY 2024-25. Further, the surcharge rate shall be ‘NIL’ if the total income of a ‘specified fund’ as referred to in section 10(4D) includes any income in respect of securities as given under section 115AD(1)(a) from AY 2024-25.
Health & Education Cess (HEC) Rates
HEC is 4% in all cases for AY 2023-24. However, the HEC is nil if the total income of a ‘specified fund’ as referred to section 10(4D) includes any income in respect of securities as given under section 115AD(1)(a) for AY 2024-25.
Tax Rebate u/s 87A
AY 2023-24
Resident individuals with taxable income up to Rs 500,000 can claim a tax rebate of up to Rs 12,500 u/s 87A of the Income Tax Act, 1961.
AY 2024-25
Resident individuals with taxable income up to Rs 700,000 can claim a tax rebate of up to Rs 25,000 u/s 87A of the Income Tax Act, 1961.
Further, if the resident individual’s total income marginally exceeds Rs 700,000 and the tax payable on such income exceeds the difference between the total income and Rs 700,000, he can claim a rebate with marginal relief to the extent of the difference between the tax payable on such total income and the amount of income by which it exceeds Rs 700,000.
Alternate Minimum Tax (AMT)
In the case of taxpayers under the new tax regime, the provisions relating to AMT shall not be applicable.
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