Marginal Relief
The concept of marginal relief is designed to provide relaxation from the levy of a surcharge to a taxpayer where the total income exceeds marginally above Rs. 50 lakh, Rs. 1 crore, Rs. 2 crore, or Rs. 5 crore, as the case may be. Marginal relief is available in cases where the net total taxable income is slightly above these thresholds. The concept of how and when it’s applicable is illustrated below.
Marginal Relief Applicable Limit Set by Income Tax Act
| Net Taxable Income |
Surcharge Rate % |
| Above 50 lakh and up to 1 crore |
10% |
| Above 1 crore and up to 2 crore |
15% |
| Above 2 crore and up to 5 crore |
25% |
| Above 5 crore |
37% |
How It Works
Case 1: If Net Taxable Income for the Year is >= 50 lakh and < 1 crore
| Details |
5,195,000 |
5,200,000 |
| Surcharge Rate 10% Applicable |
10% |
10% |
| Surcharge Rate 15% Applicable |
0% |
0% |
| Marginal Limit Applicable |
Yes |
No |
| Income Tax Amount |
1,371,000 |
1,372,500 |
| Less u/s 87A |
— |
— |
| Income Tax Amount Less 87A |
1,371,000 |
1,372,500 |
| Surcharge 10% |
136,500 |
137,250 |
| Surcharge 15% |
— |
— |
| Surcharge Total Amount |
136,500 |
137,250 |
| Education Cess 3% |
45,225 |
45,293 |
| Total Tax Liability |
1,552,725 |
1,555,043 |
Case 2: If Net Taxable Income for the Year is >= 1 crore
| Details |
10,210,000 |
10,250,000 |
| Surcharge Rate 10% Applicable |
10% |
10% |
| Surcharge Rate 15% Applicable |
15% |
15% |
| Marginal Limit Applicable |
Yes |
No |
| Income Tax Amount |
2,875,500 |
2,887,500 |
| Less u/s 87A |
— |
— |
| Income Tax Amount Less 87A |
2,875,500 |
2,887,500 |
| Surcharge 10% |
— |
— |
| Surcharge 15% |
428,250 |
433,125 |
| Surcharge Total Amount |
428,250 |
433,125 |
| Education Cess 3% |
99,113 |
99,619 |
| Total Tax Liability |
3,402,863 |
3,420,244 |
