mukundasy (manager) (97 Points)
14 July 2009
CA Abhiram Bharat.
(Assistant Manager Taxation)
(508 Points)
Replied 14 July 2009
hi, plz see the following eg.
suppose, the taxable income for the f/y 2008-09 is rs. 10,30000. then, for the purpose of calculating marginal relief with regard to excess of income over rs. 10,00000 i. e. rs. 30,000 in the given case, the following steps shud be applied.
STEP I
rs 10,30000 (including surcharge)=
on first Rs.150000=nil
on next rs.150000 @ 10%+=15000
on next rs200000 @ 20%=40000
on balance Rs530000 i.e.(1030000-500000) @ 30%=159000
total tax payable=214000
Add:surcharge @ 10%on Rs214000=21400
total tax payable (including surcharge)=235400
STEP II
tax on rs. 10,00000 (excluding surcharge*)
on first Rs.150000=nil
on next rs.150000 @ 10%+=15000
on next rs200000 @ 20%=40000
on balance Rs50000 i.e.(1000000-500000) @ 30%=150000
total tax payable (excluding surcharge)=205000.
now STEPI-STEPII=235400-205000=30400.
EXCESS OF INCOME OVER RS. 1000000 IS ONLY 30000
SO, THE TAX ON EXCESS INCOME OVER RS. 1000000 CANT EXCEED THE AMOUNT BY WHICH THE INCOME EXCEEDS RS.1000000.
THEREFORE, THE RELIEF i.e. THE MARGINAL RELIEF FOR SURCHARGE WILL BE FOR RS 400. (30400-30000)
& THE TAX PAYABLE FOR THE FINANCIAL YEAR 2008-2009 SHALL BE 235400-400=Rs.235000.
REMEBER NO MARGINAL RELIEF IS GIVEN IN RESPECT OF SECONDARY & HIGHER EDUCATION CESS.
*: SURCHARGE IS APPLICABLE ONLY IF THE TOTAL INCOME EXCEEDS RS. 1000000.
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