Calculation of marginal relief

No, the normal income of assesse is computed under different head which are notified by Finance act (section 4 of IT act, 1961) The tax liability of an assesse is computed on slab basis for normal income and tax liability on LTCG is on standard rate @ 20% . Hence in the given case, the assesse cannot claim the entire amount of income as a LTCG.

No,but for calculationof marginal relief,one has to compare the tax+surcharge with tax for a income of 100 lacs. So for this calculation,what amount of incomes should be taken in 100 lac amount.           

Thanks

 

The total taxable income comes to 102 lacs(70+32) less deduction u/c VIA. So the tax liability Will be computed as under 1. First 2 lacs - nil 2. Next 3 lacs @ 10% = 30000 3. Next 5 lacs @ 20% = 100000 4. Remaining @ 30%= 660000 LTCG @ 20% = Rs. 1400000 Hence, total tax liability is Rs. 2190000 + SHEC @ 3%. Net tax liability shall be Rs. 2255700

In case of a company there is no minimum limit. Here, total taxable income is 102 lacs. Hence, marginal relief is not applicable in case of individual.

calculation for individual resident

normal incom=32l

2.5 l= nil

2.5 l @ 10%= 25000

5l @ 20%= 100000

22l @ 30%=660000

LTCG 70 l @ 20%=1400000

tax=2185000

surcharge=218500

total=2403500

now i have to calculate marginal relief

for a total income of 100l,how much should i take as normal income and how much as ltcg?

Surcharge cannot be levied on individual, it is applicable only in case of companies.