Marginal relief

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 March 2014 Hello everyone

I want to ask about marginal relief? I understood what is marginal relief but at the time of calculating I am getting confused with the upper limit of marginal relief.
To simplify,say marginal relief is available for 1,02,00,000 but not for 1,04,00,000. How is it calculated? I want to know how marginal relief's upper limit is decided or is it restricted by some percentage or something else ?? Please solve my query.

Thanks in advance.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

26 March 2014 Marginal relief reaches the 'upper limit' when the tax payable including surcharge plus one crore equals the total income of the assessee.

Guest

Guest (Expert)

26 March 2014 Hey first understand what is marginal relief.I will try to explain you..Marginal Relief simply mean relief on that portion of tax which has arrive due to the surcharge.Take an examply .Calculate tax on 1Crore And 1.02 Crore.Tax on 1 crore comes out to be 30Lakh and on 1.02 comes out to be 3366000 (3060000+306000).Analyse this now how unfair is this with the assesse that his income increase by only 2lakh and his tax burden increses by 366000.To give a relief for this income tax introduce concept of marginal relief according to which assessee have to pay the tax 3200000(3000000+increase income i.e 20000).Hence relief of Rs 166000 would be availaibe here..Hope u will understand now.

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