The Finance Act 2016, Added new rate of Income tax surcharge for the Financial Year 2016-17.The tax ( surcharge) rate is different for different categories of tax payers.There is a big rate difference when comparing individuals with Dmestic & Foreign Companies because, a higher rate of income tax already been declared for Domestic companies & Companies other than Domestic
The Latest Income tax surcharge rates are
12% Surcharge is applicable for tax payers under category Individuals, Hindu undivided family ( HUF), Partner ship firms,LLP Who’s Income Exceeds 1 Crore
7% Surcharge is applicable for Domestic company who’s income exceeds 1( one)crore up to 10 Crores ( Less than ten crores)
12% Surcharge is applicable for Domestic Company who’s income exceeds 10 crores.
2% Surcharge is applicable for Companies other than Domestic company and its income is less than 10 crore but greater than 1 crore.
5% Surcharge is applicable for companies other than domestic companies but income exceeds 10 crores.
How to calculate Surcharge
As per Finance Act 2003, Which was the act declared Surcharge on Income Tax, The tax would be levied only if the tax payer income exceeds 1 crore. But the surcharges on income tax to be paid on Income tax not on total income by the tax payers.
Calculation of surcharges for Individual & HUF
For Example : MR.A ‘s Taxable income is 80 lakh, no Surcharge is Applicable.
Taxable income of Mr.A is Rs 1,50,00000 Then his tax is calculated 4200000 after considering all deductions Surcharge to be calculated as follows.
4200000 x 12 % = 504000
For HUF also same calculation method is applicable.
Calculation of surcharges for Partnership & LLP
No surcharge is applicable for less than One crore.
For Example : The Taxable income of a Partnership or LLP is 11000000
Suppose tax payable is calculated 3300000 , then surcharge is calculated as
33,00000 x 12% = 396000
In the same manner you can calculate surcharge of domestic company and Foreign company.