Surcharge for AY 2018-19

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Dear experts,
If an assessee has a income of 1.01 cr then applicable surcharge would be 15%. Now my question is whether that assessee has to pay surcharge even on the income exceeding 50 lakhs at 10%?
Should he pay surcharge on surcharge if that is the case?

Reply at the earliest convenience

Thanks in advance
Dileep
Replies (3)

No question of surcharge over surcharge. Check how the surcharge is calculated as:

The surcharge is levied on the total income tax of the taxpayer. It is not levied on the income of the taxpayer. Therefore, to calculate the surcharge, the income tax should be calculated first. Once you get the income tax, calculate the surcharge as well.

Secondly, Surcharge  is levied as

  • 10% of the Income Tax, where taxable income is more than Rs. 50 lacs and upto Rs. 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. 50 lacs by more than the amount of increase in taxable income.
  • 15% of the Income Tax, where taxable income is more than Rs. 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. 1 crore by more than the amount of increase in taxable income. (it is known as Marginal Relief).

Here for 1 Cr income tax liability (before surcharge) would be Rs. 28,12,500/-

+ (10% SC) = Rs. 30,93,750/-

 + (15% SC) = Rs. 32,34,375. 

So, any additional income over 1 Cr. increases margin from 10% to 15% by amount of  Rs. 140625/-; hence relief is provided for increase of tax upto the increase in the taxable income. ( in the particular case, it will be restricted to Rs. 31,93,750/- plus cess)

surcharge of 10% will be levied on people with annual income between INR. 50 lakh to INR. 1 crore.
surcharge of 15% will be levied on people with annual income above Rs 1 crore.

Does the Income tax Return Excel Utility calculates the Marginal Relief on Surcharge Automatically..? I am filling ITR-2 and the Total taxable income is Rs 10214190/- however the Surcharge it is calculating is full 15% of the Tax amount of Rs. 2748343/- which comes to Rs. 412251/- which is wrong. How do I claim the marginal relief then, as the calculation is automatic and I cannot change it. Please help ? Have inquired a lot with Aayakar Sewa kendra but is invain. 


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