Income-tax surcharge applies when total income crosses thresholds: 10% above ₹50L, 15% above ₹1Cr, 25% above ₹2Cr, 37% above ₹5Cr (old regime) or 25% capped (new regime post-FY 2023-24). Marginal relief prevents the surcharge from exceeding the income amount above the threshold - the calculator applies it automatically.
When to use this
Use when: total income is near a surcharge threshold (₹49L crossing to ₹50L+, ₹95L crossing to ₹1Cr), planning tax-saving investments to dip below a threshold, evaluating whether to defer income to next FY to avoid surcharge band, computing exact tax for high-income employees.
Frequently Asked Questions
What's marginal relief in simple terms?
Surcharge kicks in at strict thresholds (50L, 1Cr, 2Cr, 5Cr). Without relief, earning ₹1 more than ₹50L would trigger surcharge on the WHOLE tax (not just the marginal income) - sometimes leading to a higher net tax than if you'd earned slightly less. Marginal relief caps the surcharge so this doesn't happen.
Does marginal relief apply to both old and new regime?
Yes - it applies to both regimes at all surcharge thresholds. The calculation differs slightly between old (37% top rate) and new (25% cap post-Budget 2023). The calculator picks the right formula based on your regime selection.
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