Income Tax Surcharge Rate & Marginal Relief for AY 2025-26

A Surcharge is an Additional Charge Imposed on Individuals and Entities When Their Total Income During a Financial Year is More Than Inr 50,00,000. The Surcharge is Different for Individuals, Companies and Firms/llps/and Local Authorities. Additionally, the Income Tax Surcharge Rate Also Varies According to the Income.

Marginal Relief is a Tax Provision Provided by the Income Tax to Prevent Taxpayers From Paying Additional Tax  (Income Tax + Surcharge) From Earning More Than the Threshold Limit During the Fiscal Year. It Helps the Taxpayers in Reducing Their Tax Liability.

Marginal Relief is Eligible for Indian Residents Only, Whether They Are Salaried or Non-salaried Individuals. Under Section 87a of the Income Tax Act, Marginal Relief Helps Taxpayers Whose Income is More Than Inr 12,00,000 and Does Not Exceed Inr 12,75,000. By Providing Some Tax Relief, It Helps the Taxpayers Decrease Their Tax Burden.

Marginal Relief is the Difference Between the Excess Tax and the Excess Income. However, if the Excess Tax is Less Than the Excess Income, in This Scenario, Marginal Relief Will Not Be Provided to the Taxpayer. Marginal Relief = (Tax Payable on Income With Surcharge) - (Payable Income Tax + Excess Income).

Yes, Marginal Relief is Applicable in the New Tax Regime. Through This Provision, Taxpayers Whose Income is More Than the Threshold Limit Can Reduce Their Tax Burden and Pay a Fair Tax Portion on the Excess Amount.