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Income tax surcharge rate for FY 2016-17 and computation method

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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.

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