What is surcharge and how it is computed?

Raju Choudhary

Administrator
Staff member
#1
What is surcharge and how it is computed?. Surcharge is an additional tax levied on the amount of income-tax. In case of taxpayers other than company surcharge is levied @ 12% on the amount of income-tax where the total income of the taxpayer exceeds Rs. 1 crore (*).

In case of a domestic company surcharge is levied @ 7% on the amount of income-tax if the total income exceeds Rs. 1 crore but does not exceed Rs. 10 crore and @ 12% on the amount of income-tax if total income exceeds Rs. 10 crore (*).

In case of a foreign company surcharge is levied @ 2% on the amount of income-tax if the total income exceeds Rs. 1 crore but does not exceed Rs. 10 crore and @ 5% on the amount of income-tax if total income exceeds Rs. 10 crore (*).

(*) A taxpayer can claim marginal relief from the amount of surcharge, subject to certain conditions. Refer to next FAQ for concept of marginal relief.

Illustration for better understanding


Mr. Kapoor is a doctor, his total income for the year amounted to Rs. 84,00,000. Will he be liable to pay surcharge, if yes, then how much?
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Surcharge is additional tax levied on the amount of income-tax. In case of taxpayers other than company surcharge is levied @ 12% on the amount of income-tax where the total income of the taxpayer exceeds Rs. 1 crore. In this case, total income of Mr. Kapoor is below Rs. 1 crore, hence, he will not be liable to pay surcharge.
 
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