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Surcharge on Income Tax FY 2019-20

Surcharge on Income Tax
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Surcharge on Income Tax FY 2019-20 (AY 2020-21)

Surcharge

TAX on TAX is called SURCHARGE. The surcharge is applicable only if the total taxable income exceeds a certain prescribed limit. This prescribed limit in case of individual assessees is Rs. 50 lakhs in India. This means surcharge is not applicable to people having a low total income/ total income less than Rs. 50 lakhs. The surcharge is calculated on tax payable and not total income. Rate of the surcharge is determined based on total income but the calculation of surcharge is done based on tax payable. Education and higher education cess at the rate of 4% are to be calculated after adding a surcharge.

The rate of surcharge has been enhanced by the respected FM in the Union Budget 2019.

Income Tax Slab Rates – FY 2019-20 (AY 20-21)

Income Tax Slab Rates – FY 2018-19 (AY 2019-20)

Surcharge on Income Tax

Surcharge for Individual Assessees for FY 2019-20

The surcharge will be applicable if the total income exceeds Rs. 50 lakhs.

  • If the total income is up to Rs. 50 Lakhs there will no surcharge.
  • If the total income exceeds Rs. 50 lakhs but up to Rs. 1 crore then surcharge will be 10% on applicable income tax.
  • If the total income exceeds Rs. 1 crore but up to Rs. 2 crores then a surcharge will be 15% on applicable income tax.
  • If the total income exceeds Rs. 2 crores but up to Rs. 5 crores then a surcharge will be 25% on applicable income tax
  • If the total income exceeds Rs. 5 crore then a surcharge will be 37% on applicable income tax

Note: Surcharge will be subject to marginal relief.  So, the maximum increase in tax payable due to surcharge will be lower from the following

  • Income above Rs. 50 lakhs/Rs. 1 Crore/Rs. 2 Crores//Rs. 5 Crores.
  • Total amount payable as income-tax and surcharge less the Total amount payable as income-tax on total income of Rs. 50 lakhs/Rs. 1 Crore/Rs. 2 Crores//Rs. 5 Crores.

The same rate of surcharge will be applicable to HUFs, AOP, BOI and Artificial Juridical Person as to Individual assessee.

 

Surcharge for Co-operative Societies and Firms for FY 2019-20

Surcharge will be applicable only if the total income exceeds Rs. 1Crore.

  • If the total income is up to Rs. 1Crore there will no surcharge.
  • If the total income exceeds Rs 1 crore then surcharge will be 12% on applicable income tax.

Note: Surcharge will be subject to marginal relief.  So, the maximum increase in tax payable due to surcharge will be lower from the following

  • Income above Rs. 1 Crore.
  • Total amount payable as income-tax and surcharge less the Total amount payable as income-tax on total income of Rs. 1 Crore.

Surcharge on Domestic Companies for FY 2019-20

Surcharge will be applicable only if the total income exceeds Rs. 1 Crore.

  • If the total income is up to Rs. 1 crore there will no surcharge.
  • If the total income exceeds Rs. 1 crore but less than Rs. 10 crores then a surcharge of 7% will be applicable on income tax.
  • If the total income exceeds Rs. 10 crores then a surcharge will be 12% on applicable income tax.

Marginal Relief will be provided.

 

Surcharge on Companies (other than domestic companies) for FY 2019-20

Surcharge will be applicable only if the total income exceeds Rs. 1 Crore.

  • If the total income is up to Rs. 1 crore there will be no surcharge levied.
  • If the total income exceeds Rs. 1 crore but less than Rs. 10 crores then a surcharge of 2% will be applicable on income tax.
  • If the total income exceeds Rs. 10 crores then a surcharge will be levied at 5% on the applicable income tax.In

Marginal Relief will be provided.

In all other cases, like Dividend distribution Tax u/s 115 O, Tax on distributed income to shareholders/unitholders, etc. the surcharge of 12% is applicable.

The article is compiled by CA Ankita Khetan. If you have any queries concerning the above article. Please write to us either in the comments section below or email us on info.financepost@gmail.com.

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