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Surcharge on Income tax ,Rates FY 2019-2020.

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Surcharge is an additional tax calculated on the Income tax for certain categories of tax payers based on Income earned.  This means surcharge is  calculated not on the Taxable Income But on the tax calculated on the Taxable income. Government Utilize this surcharge fund  for the purpose to provide quality health service and universalized quality basic education and secondary and higher education. Surcharge is levied subject to a marginal relief. Not all tax payers shall pay surcharge on tax.

How to calculate Surcharge  ?

ABC ltd a domestic company taxable income is  15000000. The The total turn over of the company is less 250 crore in Previous year 2017-18 .

As per New income tax slab rate for  the FY 2019-20  OR the AY -2020-21 the domestic company is charged  25 % income tax if it’s  total turnover or the gross receipt in the previous year 2017-2018 does not exceed two hundred and fifty crore rupees.

  • Now the Income tax rate  for the AY is 2020-21 is  25 %
  • The income tax payable is calculated as  1.5 Cr X 25% = 3750000

7%  Surcharge is applicable to domestic companies Income is greater than 1 crore  but less than 10 crore

  • The surcharge is 3750000 x 7% = 262500

Surcharge Applicable  For AY 2020-2021

Here is the new surcharge rate after Union budget 2019. This rates are applicable to FY -2019-20 or AY 2020-21.

Surcharge rate for  Individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not,or every artificial juridical person.

Income Slab Surcharge %
50 Lakhs to 1 Crore 10
Above 1 Crore 15

 

Provided that in the case of persons mentioned above having total income exceeding
(a) Fifty lakh rupees but not exceeding one crore rupees, the total amount payable as incometax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees;
(b) one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Surcharge for co-operative society, Partnership firm, Local authority.

For co- operative society, the surcharge is applicable only when it’s total income exceeds 1 Crore.

Income Slab Surcharge %
Above 1 Crore 12
  • Provided that in the case of every co-operative society,Firm,Local authority  mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Surcharge for domestic company

For Indian company having more than 1 crore Income is liable for a surcharge .The slab is as follows.

Income Slab Surcharge %
Above 1 crore not exceeding 10 Crore 7
Above 10 Crore 12

Surcharge rate for Foreign Company

The foreign company is already charged a Higher rate of Income tax . Hence They are charged a less rate of surcharge.

Income Slab Surcharge %
Above 1 crore not exceeding 10 Crore 2
Above 10 Crore 5
    The below clause is applicable for both Domestic and foreign companies.
  • Provided that in the case of every company having a total income exceeding one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees:
  • Provided further that in the case of every company having a total income exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.

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