New Income Tax Slabs for FY 2023-24 - Check Your Slab Now

With the Union Budget having been tabled recently in the parliament, a majority of the taxpayers, especially the middle-class earning population had a lot of expectations from this budget. Better tax incentives, more relaxations, and tax slabs that promote savings were some of the expectations that were pinned in this budget. The budget delivered on that by introducing new income tax slabs for taxpayers. As an earning individual and a taxpayer, how did the budget benefit you? Let’s look at the new tax slab that were introduced and the overall benefit of those slabs.

Income Tax Slab

As per the budget, the following are the new tax slabs:

The following are the tax slabs for those aged between the age of 60 to 80:

These are the income tax slabs for those above the age of 80 are:

These are the tax slabs for Hindu Undivided Families (HUF) and Individuals:

These are the income tax slab as per the old tax regime:

Differences between the old regime and the new regime

There are major differences between the two tax regimes. They are:

1. The new tax regime has more tax slabs with lower tax rates compared to the old tax regime.
2. The income tax slabs for FY 2022-23 fluctuate based on whether you go with the old regime or the new one.
3. The deductions allowed under Chapter VI A under the old tax regime are completely gone under the introduction of the new tax regime.
4. This means whatever chances you were getting of decreasing your tax liability have been reduced.
5. Compared to the new regime, there were up to 70 tax deductions and exemptions which helped save a lot for the taxpayer.
6. Despite having better slab rates, the absence of tax deductions and exemptions is a disadvantage.

Health insurance benefits

Under Section 80D of the Income Tax Act, you are eligible for tax deductions for premium payment made towards health insurance. They are:

1. If you, your partner, and your children are below the age of 60, you can avail of a deduction of up to Rs.25,000 on the premium towards your offline or online health insurance policy*.
2. If your parents, below the age of 60, are also covered in the same policy, you can avail of an additional deduction of up to Rs.25,000. This means the maximum deduction for those below the age of 60 is Rs.50,000*
3. If your parents are above the age of 60, you can avail of a maximum deduction of Rs. 50,000 for them, in addition to the deduction of up to Rs.25,000 you are availing for you and your partner. In this situation, the maximum deduction is up to Rs.75,000*.
4. If either you, your partner, or your children, the beneficiaries of the policy, are above the age of 60, the maximum deduction that you can avail of is up to Rs.50,000*.
5. If your parents are also above 60, an additional deduction of up to Rs.50,000 can be availed. Thus, the maximum deduction is up to Rs.1 Lakh*.

However, these benefits can be availed under the old regime. Under the new regime, these deductions are not available.

Conclusion

While the new tax regime and the slabs introduced might benefit you greatly in terms of tax savings, you might feel the pinch when it comes to paying premiums for your health insurance. However, it is important to keep yourself and your loved ones insured with the best health insurance policy for them.   *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.