Marginal Relief calculation above 50 Lakh

Income Tax || Marginal Relief calculation above 50 Lakh

Marginal Relief calculation above 50 Lakh  

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, 1 Cr and 2 Cr.


Example - 
     
            


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

Calculate tax on total income 

      Total Tax – 13,42,500
      Surcharge @ 10 % on total tax – 1,34,250
      Total Tax with Surcharge (A) – 14,76,750

Now calculate tax on up to 50 Lakh.

      Tax on income Up to 50 Lakh (B)– 13,12,500
      Excess Tax Payable (A-B) – 1,64,250
      Balance Remaining Income (C) – 1,00,000    

Marginal relief = Excess Tax Payable – Balance Remaining Income

      1,64,250 - 1,00,000 = 64250 (Total Marginal relief)

Net Surcharge - 1,34,250 (surcharge on total income) – 64,250 (marginal relief) = 70,000

Hope, this Helps.

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