What is Marginal Relief & its calculation above 2 Crore

What is Marginal Relief & its calculation 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, 1Cr and 2 Cr  and the amount of income that exceeds Rs.50 Lakhs, 1Cr and 2 Cr.
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Example : 



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

Calculate tax on total income 

Total Tax  - 5890965
Surcharge @ 25 % on total tax - 1472741
Total Tax with Surcharge - 7363706

Now calculate tax on upto 2 CR.

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

Marginal relief (Tax on total income - tax on upto 2cr+ Balance remaining income) -7363706-6945925 = 417781

Net Surcharge -  1472741 (surcharge on total income )- 417781 (marginal relief ) = 1054960

Hope this Helps 




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