Concept of Surcharge in Income Tax

 Surcharge is an additional Tax which is charged on Tax payable at specified Percentage.

 

Rate of Surcharge: -

 

For Resident as well as Non-resident Individual, Hindu Undivided Family (HUF), Artificial Juridical Person (AJP), Association of Persons (AOP), Body of Individuals (AOP): -

·        If Net Taxable Income is up to Rs. 50 Lakhs – No Surcharge

·        If Net Taxable Income is above Rs. 50 Lakhs up to Rs. 1Crore – 10%

·        If Net Taxable Income is above Rs. 1 Crore up to Rs. 2 Crore – 15%

·        If Net Taxable Income is above Rs. 2 Crore up to Rs. 5 Crore – 25%

·        If Net Taxable Income is above Rs, 5 Crore – 37%

 

Exceptions: -

·        For Income chargeable u/s 68, 69, 69A, 69B, 69C and 69D (Deemed Incomes) rate of Surcharge is at the rate of 25% always.

·        Maximum rate of surcharge on Tax Payables on Income chargeable under Sec 111A, Sec 112A and Sec 115AD is 15%. If Net Taxable Income (including such Incomes) of Assesses exceeds Rs. 2 Crores but Net Taxable Income (excluding such Incomes) doesn’t exceed Rs. 2 Crores than Maximum rate of Surcharge is 15%.  

 

For Domestic Company: -

·        If Net Taxable Income is up to Rs. 1 Crore – No Surcharge

·        If Net Taxable Income is above Rs. 1 Crore up to Rs. 10 Crores – 7%

·        If Net Taxable Income is above Rs. 10 Crore – 12%

 

Exceptions: -

·        Companies opting for benefit of Sec 115BAA and Sec 115BAB than Rate of Surcharge is always 10% irrespective of Income (i.e. Rate of Surcharge is 10% form Rs. 1)

 

For Foreign Company: -

·        If Net Taxable Income is up to Rs. 1 Crore – No Surcharge

·        If Net Taxable Income is above Rs. 1 Crore up to Rs. 10 Crores – 2%

·        If Net Taxable Income is above Rs. 10 Crore – 5%

 

For Partnership Firm (including Limited Liability Partnership -LLP), Local Authority, Corporative Society: -

·        If Net Taxable Income is up to Rs. 1 Crore – No Surcharge

·        If Net Taxable Income is above Rs. 1 Crore – 12%

 

Exceptions: -

·        Cooperative Societies opting for benefit of Sec 115BAD than Rate of Surcharge is always 10% irrespective of Income (i.e. Rate of Surcharge is 10% form Rs. 1)

 

Note: - Marginal Relief of additional Tax (before Health and Education Cess) exceeding additional Income is provided to all assesses if Additional Tax Liability arise due to surcharge exceeds Income earned over limit when surcharge is applicable.