Dear experts,
What is marginl relief in surcharge if an assessee has taxable income within Rs. 50 lacs to Rs. 100 lacs? How is it calculate?
8 Replies
rama krishnan
(12239 Points)
Replied 01 December 2018
marginal relief is nothing but the surcharge shouldn't exceed the amount that is in excess of rs. 50 lakhs
Marginal relief calculation
Marginal Relief = Calculated Surcharge – 70% (Income – Rs. 50,00,000)
Similarly, relief shall also be provided where income exceeds marginally above Rs.1 crore. In that case, the aforesaid equation shall be changed accordingly.
Marginal relief is available in respect of surcharge only. It is not applicable in case of CESS.
Example
Mr. X aged 55 yrs. whose total income for Assessment Year 2018 – 19 is Rs.50,10,000/-Calculate total tax payable and also show working for calculation of Marginal Relief.
Income Calculation Amount
Up to Rs. 2,50,000 Nil Nil
2,50,001 – 5,00,000 2,50,000 * 5% = 12,500 12,500
5,00,001 – 10,00,000 5,00,000 * 20% = 1,00,000 1,00,000
Above 10,00,000 Balance 40,10,000 * 30% =12,03,000 12,03,000
Total Tax Before Surcharge and CESS 13,15,500
+ Surcharge 10% of 13,15,500 = 1,31,550
(-) Marginal Relief
Calculated Surcharge – 70% (Income – Rs.50 Lakh)
= 1,31,500 – 70% (50,10,000 – 50,00,000)
= 1,31,500 – 7000 = 1,24,550
(1,24,550)
Tax Before CESS 13,22,500
+ CESS 3% of 13,22,500 = 39,675 39,675
Total Tax Payable 13,62,175
Note: – The concept of marginal relief is that the amount of increase in income tax should not be more than the amount of increase in income.
Marginal relief calculation
Marginal Relief = Calculated Surcharge – 70% (Income – Rs. 50,00,000)
Similarly, relief shall also be provided where income exceeds marginally above Rs.1 crore. In that case, the aforesaid equation shall be changed accordingly.
Marginal relief is available in respect of surcharge only. It is not applicable in case of CESS.
Example
Mr. X aged 55 yrs. whose total income for Assessment Year 2018 – 19 is Rs.50,10,000/-Calculate total tax payable and also show working for calculation of Marginal Relief.
Income Calculation Amount
Up to Rs. 2,50,000 Nil Nil
2,50,001 – 5,00,000 2,50,000 * 5% = 12,500 12,500
5,00,001 – 10,00,000 5,00,000 * 20% = 1,00,000 1,00,000
Above 10,00,000 Balance 40,10,000 * 30% =12,03,000 12,03,000
Total Tax Before Surcharge and CESS 13,15,500
+ Surcharge 10% of 13,15,500 = 1,31,550
(-) Marginal Relief
Calculated Surcharge – 70% (Income – Rs.50 Lakh)
= 1,31,500 – 70% (50,10,000 – 50,00,000)
= 1,31,500 – 7000 = 1,24,550
(1,24,550)
Tax Before CESS 13,22,500
+ CESS 3% of 13,22,500 = 39,675 39,675
Total Tax Payable 13,62,175
Note: – The concept of marginal relief is that the amount of increase in income tax should not be more than the amount of increase in income.
Nitesh bind
(Student CA Final )
(12692 Points)
Replied 01 December 2018
Wow. Very Nice Explanation brother @ Rama Krishan. 😊
Nitesh bind
(Student CA Final )
(12692 Points)
Replied 01 December 2018
You are always Amazing. @ Rama Krishnan.
rama krishnan
(12239 Points)
Replied 01 December 2018
actually I'm learning lot of new things from your posts and replies nitesh bro.. I think you might be a ca student or new to CA profession but your replies hold years and years of maturity and clarity. all the best for your bright future
Nitesh bind
(Student CA Final )
(12692 Points)
Replied 01 December 2018
Thank you so much for such a kind comment. All I always keep in mind is just one thing that the content whatever I'm writing MUST be Helpful for others. And that's why I never believe in answering Direct to the point because in that way sometimes we make the person who was asking for help even more confused.
and I request always to everyone just one simple thing;
Be Helpful to One Another!
And this is the thing by which we could help each other our shape the future of ours and towards the Society as well.
I always adore you. Thanks. I appreciate your words. 🤗
and I request always to everyone just one simple thing;
Be Helpful to One Another!
And this is the thing by which we could help each other our shape the future of ours and towards the Society as well.
I always adore you. Thanks. I appreciate your words. 🤗
Vishesh
(CA)
(72 Points)
Replied 01 December 2018
You both are amazing sir(s). I always follows your blogs @ Nitesh sir. You write article very fine. 👌👌👏👏👏
Nitesh bind
(Student CA Final )
(12692 Points)
Replied 01 December 2018
Thank you so much Vishesh! You can visit Taxeffects.blogspot.com for some more of my work.
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