Surcharge

What is Surcharge

Additional charge payable on income tax.

It is an added tax on the taxpayers who having an higher income during a particular financial year. There are different rates of surcharge applicable to different taxpayers under the Income Tax Act, 1961.

There are 4 surcharge rates for other incomes but there are 2 surcharge rates for capital gains from Equity-Oriented MF’s, Shares & unit of a business trust.

Surcharge is a tax on tax. It is levied on the tax payable, and not on the income generated.

For example, if you have an income of Rs 100 on which the tax is Rs 30, the surcharge would be 10% of Rs 30 or Rs 3.