Surcharge on discretionary AOP/TRUST for AY 25-26

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Discussion is about tax rate and surcharge for discretionary trust/AOP for AY 2025-26. General tax is MMR 30% with surcharge depending on income slabs. Query arises where CPC applied 37% surcharge u/s 115BAC for income between 1-2 crore, questioning correctness of computation.

Urvi Shah

Urvi Shah (Querist)
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20 March 2026 What is the Tax rate and surcharge rate for discretionary Trust for AY 25-26?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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20 March 2026 For AY 2025-26, a discretionary trust is taxed at the Maximum Marginal Rate of 30%. According to recent judicial clarifications, the surcharge is not fixed at the maximum but applies based on your total income slabs (e.g., 0% if income is below ₹50 Lakh). Total effective tax for most trusts below the ₹50 Lakh threshold will be 31.2%.

Urvi Shah

Urvi Shah (Querist)
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20 March 2026 we have filed return under new tax regime i.e. u/s 115BAC and our Income is above 1 crore and below 2 crore . CPC has calculated surcharge @37% in order 143(1) is it correct?

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