Dear Experts, I wanted to bring your attention to an error in the calculation of surcharge in form ITR-2 as well as the Income Tax calculator on your website. Please allow me to consider the following scenario:
Status: Resident Male Individual
Salary income : 5.0 Crore Rupees
Income from capital gains (long term subject to 20 percent tax) : 50 Lakh Rupees
Computed tax liability according to ITR-2 and online calculator is as follows:
Income tax : 1,58,12,500
Surcharge : 38,53,125
Cess : 7,86,625
Total tax liability : 2,04,52,250
In case the salary income was to increase by 1000 rupees to Rs. 5,00,01,000 the computed tax liability according to ITR2 and online calculator becomes
Income tax : 1,58,12,500
Surcharge : 56,30,736
Cess : 8,57,741
Total tax liability : 2,23,01,277
Thus for earning Rs.1000 more as salary income, one has to pay Rs.18,49,027 more as income tax. Marginal relief on surcharge is not applied in this case. Cut-off amount for Marginal relief has not been increased by the amount of income that is not subject to greater than 15 percent surcharge.
Do you agree that the above calculation is in error?
Attachments: Screenshots from online calculator showing the above two calculations
Attached File : 3899933 20230705143109 incometax calc greater than 5c.pdf downloaded: 68 times
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