What is Surcharge?

Income Tax Surcharge is considered an additional charge added to the income tax. It is added to those taxpayers who have crossed the threshold for the income flow. If the taxpayer has a higher income than the threshold, then a surcharge will be added to the existing taxes for the taxpayer. They have to pay the surcharge and later on claim marginal relief on that.

Surcharge Rates for Individuals

There are different surcharges on income tax for individuals of different income slabs under the old tax regime and the new tax regime. Here is a table representing the information:

Income limit for net taxes	Surcharge rate on income tax under the old regime	Surcharge rate on income tax under the new regime
Less than Rs 50 lakhs	Nil	Nil
More than Rs 50 lakhs but less than Rs 1 Crore	10%	10%
More than Rs 1 Crore but less than Rs 2 Crore	15%	15%
More than Rs 2 Crore but less than Rs 5 Crore	25%	25%
More than Rs 5 Crore	37%	25%

Surcharge Rates for the Company

There are different surcharge rates for a company under different income slabs, which are taxable. These surcharge tax rates are different under the normal provisions and under the sections 115BAA or 115BAB. Here is a tabular representation of the rates of surcharge:

Net Income Taxable Limit	Surcharge Rate on Income Tax under normal provisions	Surcharge Rate on Income Tax under section 115BAA or 115BAB
Less than Rs 1 Crore	-	10%
More than Rs 1 crore but less than Rs 10 crores	7%	10%
More than Rs 10 Crores	12%	10%

As there is no threshold limit on the surcharge rate on income taxes under section 115BAA or 115BAB, no marginal relief can be claimed on that. It is the same for all the income slabs.

Related Glossary

Explore key terms and definitions related to this topic to deepen your understanding.

Self-Assessment Tax

Short-Term Capital Assets

Short-Term Capital Gain

Special Audit

Speculative Income

Survey

TAN

Tax Advisor

Tax Base