Understanding Marginal Relief: Balancing Tax Liabilities
Marginal relief is available from the Surcharge in the following manner:
In case Net Income exceeds ₹ 1 crore, the amount payable as income tax and Surcharge shall not exceed the total amount payable as income tax on Total Income of ₹ 1 crore by more than the amount of income that exceeds ₹ 1 crore.
Individual:
According to the Income-tax provisions, a al relief will be provided to certain taxpayers up to the amount of the difference between the excess tax payable (including surcharge) on the income above Rs.50 lakhs and the amount of income that exceeds Rs.50 Lakhs.
Marginal relief for Firms:
Where the total income is more than Rs.1 crore, a surcharge of 12% will be levied on the income tax payable. A al relief will be provided to such taxpayers having a total income of more than Rs.1 crore
i.e., the income tax payable (including surcharge) on the higher income should not exceed the income tax payable on Rs.1 crore by more than the amount of income that exceeds Rs.1 crore
Marginal relief for Companies:
Marginal relief will only be provided to such companies having a total income of more than Rs.1 crore but less than Rs.10 crores
i.e., the income tax payable (including surcharge) on the higher income should not exceed the income tax payable on Rs.1 crore by more than the amount of income that exceeds Rs.1 crore.