how is its calculation done for incomes above 2 Crore

ZenIT || What is Marginal relief and how is its calculation done for incomes above 2 Crore

Marginal Relief calculation above 2 Crore:
Marginal 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, 1 crore, and 2 crores and the amount of income that exceeds Rs. 50 lakhs, 1 crore, and 2 crores.
Example : 



The surcharge that is coming in the above illustration (computation), calculation is given below –

Calculate tax on total income:
Total Tax - 58,90,965
Surcharge @ 25 % on total tax - 14,72,741
(A) = Total Tax with Surcharge- 73,63,706

Now calculate tax on upto 2 Cr.:

Tax on income upto 2cr. (B) :- 5812500
Surcharge on tax up to 2cr @15% (C) :- 871875
Balance remaining income (20261550-20000000) (D) :- 261550
(E) = Above is the total of 3 calculations (B+C+D) :- 6945925

Marginal relief (A-E) :- 7363706-6945925 = 417781.
Net Surcharge -  1472741 (Surcharge on Total Income) - 417781 (Marginal Relief) = 1054960

Hope this Helps.

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