Income Tax
Definition
A direct tax levied by the government on the income earned by individuals and entities. In India, income tax is administered under the Income Tax Act, 1961. Two regimes exist: old (with deductions) and new (lower rates, fewer deductions). Filed annually by July 31st.
Why is Income Tax Important?
Navigating the Indian tax system requires a clear understanding of terms like Income Tax. With the introduction of the new income tax regime alongside the old one, taxpayers must evaluate their deductions, exemptions, and tax brackets carefully. This concept is a key component in optimizing your tax liabilities under the Income Tax Act and GST framework.
Proper tax planning using this metric can help individuals and businesses maximize their take-home income while remaining fully compliant with government regulations. We provide free tax calculators to help you estimate these figures accurately and make informed decisions before filing your returns.
What is Income Tax?
Income Tax is a direct tax levied by the Government of India on the income earned by individuals, HUFs, firms, and companies during a financial year (April–March). It is governed by the Income Tax Act, 1961 and administered by the CBDT.
Income Tax Slabs — New Regime (FY 2024-25)
| Income Range | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹7,00,000 | 5% |
| ₹7,00,001 – ₹10,00,000 | 10% |
| ₹10,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Old vs. New Tax Regime
| Feature | Old Regime | New Regime |
|---|---|---|
| Deductions (80C, 80D, etc.) | Available | Not available |
| Standard Deduction | ₹50,000 | ₹75,000 |
| Tax rates | Higher | Lower |
| Best for | Those with heavy deductions | Those with few deductions |