All You Need to Know About Marginal Relief on Surcharge Under Income Tax Act
What is Marginal Relief?
The concept of marginal relief on surcharge under Income Tax Act is designed to provide relaxation from the levy of a surcharge to a taxpayer where the total income exceeds marginally above Rs. 50 lakh, Rs. 1 crore, Rs. 2 crore, or Rs. 5 crore, as the case may be. Marginal relief is available in cases where the net total taxable income is slightly above these thresholds. The concept of how and when it’s applicable is illustrated below.
Marginal Relief Applicable Limit Set by Income Tax Act
| Net Taxable Income | Surcharge Rate % |
|---|---|
| Above ₹50,00,000 and up to ₹1,00,00,000 | 10% |
| Above ₹1,00,00,000 and up to ₹2,00,00,000 | 15% |
| Above ₹2,00,00,000 and up to ₹5,00,00,000 | 25% |
| Above ₹5,00,00,000 | 37% |
How Marginal Relief Works
Surcharge Summary
Select case to view detailed amounts
| Item | Value A | Value B |
|---|---|---|
| Net Taxable Income (example) | 5,195,000 | 5,200,000 |
| Surcharge Rate 10% Applicable | 10% | 10% |
| Surcharge Rate 15% Applicable | 0% | 0% |
| Marginal Limit Applicable | Yes | No |
| Income Tax Amount | 1,371,000 | 1,372,500 |
| Less u/s 87A | -- | -- |
| Income Tax Amount Less 87A | 1,371,000 | 1,372,500 |
| Surcharge 10% | 136,500 | 137,250 |
| Surcharge 15% | -- | -- |
| Surcharge Total Amount | 136,500 | 137,250 |
| Education Cess 3% | 45,225 | 45,293 |
| Total Tax Liability | 1,552,725 | 1,555,043 |