{"id":10858,"date":"2023-01-16T15:16:11","date_gmt":"2023-01-16T09:46:11","guid":{"rendered":"https:\/\/razorpay.com\/blog\/?p=10858"},"modified":"2023-01-17T10:54:17","modified_gmt":"2023-01-17T05:24:17","slug":"surcharge-on-income-tax","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/business-banking\/surcharge-on-income-tax\/","title":{"rendered":"An Overview of Surcharge on Income Tax"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">In general terms, a surcharge is an extra amount charged over and above the original monetary value of a product or a service. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In terms of taxation, a surcharge amount is the added sum levied on the tax payable by an entity.\u00a0<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d09c3d741ed\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d09c3d741ed\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/surcharge-on-income-tax\/#What_Is_a_Surcharge_on_Income_Tax\" >What Is a Surcharge on Income Tax?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/surcharge-on-income-tax\/#What_Is_the_Rate_of_Surcharge_on_Income_Tax\" >What Is the Rate of Surcharge on Income Tax?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/surcharge-on-income-tax\/#What_Is_Marginal_Relief_in_Surcharge_on_Income_Tax\" >What Is Marginal Relief in Surcharge on Income Tax?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/surcharge-on-income-tax\/#How_Can_RazorpayX_Help_Taxpayers\" >How Can RazorpayX Help Taxpayers?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/surcharge-on-income-tax\/#Frequently_Asked_Questions\" >Frequently Asked Questions<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_Is_a_Surcharge_on_Income_Tax\"><\/span><b>What Is a Surcharge on Income Tax?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A surcharge on income tax is essentially a tax charged on the tax. This is not levied on the amount generated from income. <span data-offset-key=\"31k24-8-0\">In<\/span><span data-offset-key=\"31k24-9-0\">come<\/span><span data-offset-key=\"31k24-10-0\"> tax<\/span><span data-offset-key=\"31k24-11-0\"> sur<\/span><span data-offset-key=\"31k24-12-0\">charges<\/span><span data-offset-key=\"31k24-13-0\"> are<\/span><span data-offset-key=\"31k24-14-0\"> additional<\/span><span data-offset-key=\"31k24-15-0\"> taxes<\/span><span data-offset-key=\"31k24-16-0\"> imposed<\/span><span data-offset-key=\"31k24-17-0\"> on<\/span><span data-offset-key=\"31k24-18-0\"> income<\/span><span data-offset-key=\"31k24-19-0\"> earned<\/span><span data-offset-key=\"31k24-20-0\"> by<\/span><span data-offset-key=\"31k24-21-0\"> certain<\/span><span data-offset-key=\"31k24-22-0\"> taxpayers<\/span><span data-offset-key=\"31k24-23-0\">.<\/span><span data-offset-key=\"31k24-24-0\"> These<\/span><span data-offset-key=\"31k24-25-0\"> sur<\/span><span data-offset-key=\"31k24-26-0\">charges<\/span><span data-offset-key=\"31k24-27-0\"> are<\/span><span data-offset-key=\"31k24-28-0\"> usually<\/span><span data-offset-key=\"31k24-29-0\"> imposed<\/span><span data-offset-key=\"31k24-30-0\"> at<\/span><span data-offset-key=\"31k24-31-0\"> a<\/span><span data-offset-key=\"31k24-32-0\"> higher<\/span><span data-offset-key=\"31k24-33-0\"> rate<\/span><span data-offset-key=\"31k24-34-0\"> than<\/span><span data-offset-key=\"31k24-35-0\"> the<\/span><span data-offset-key=\"31k24-36-0\"> regular<\/span><span data-offset-key=\"31k24-37-0\"> income<\/span><span data-offset-key=\"31k24-38-0\"> tax<\/span><span data-offset-key=\"31k24-39-0\"> rate<\/span><span data-offset-key=\"31k24-40-0\"> and<\/span><span data-offset-key=\"31k24-41-0\"> are<\/span><span data-offset-key=\"31k24-42-0\"> designed<\/span><span data-offset-key=\"31k24-43-0\"> to<\/span><span data-offset-key=\"31k24-44-0\"> target<\/span><span data-offset-key=\"31k24-45-0\"> certain<\/span><span data-offset-key=\"31k24-46-0\"> types<\/span><span data-offset-key=\"31k24-47-0\"> of<\/span><span data-offset-key=\"31k24-48-0\"> income<\/span><span data-offset-key=\"31k24-49-0\"> earners<\/span><span data-offset-key=\"31k24-50-0\">.<\/span><\/span><\/p>\n<p><span style=\"font-weight: 400;\"> Therefore, if an individual or an organisation falls under the higher tax slab of 30%, this entity will be under the purview of a <\/span><b>surcharge on income tax<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To further elaborate, this fee will be levied on a person if he or she is earning more than Rs 50 lakhs per annum. On the other hand, when it comes to a corporation, this charge will be applicable if it is earning Rs 1 crore annually.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_Is_the_Rate_of_Surcharge_on_Income_Tax\"><\/span><b>What Is the Rate of Surcharge on Income Tax?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The rate might vary significantly based on the entity on whom this surcharge is getting levied. The different rates for individuals and different companies had been discussed below.\u00a0<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td colspan=\"2\"><b>FOR INDIVIDUALS<\/b><\/td>\n<\/tr>\n<tr>\n<td><b>LIMIT OF INCOME<\/b><\/td>\n<td><b>RATE OF SURCHARGE ON INCOME TAX<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Below 50 lakhs<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Zero<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">50 Lakh \u2013 1 Crore<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">1 Crore \u2013 2 Crore<\/span><\/td>\n<td><span style=\"font-weight: 400;\">15%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">2 Crore \u2013 5 Crore<\/span><\/td>\n<td><span style=\"font-weight: 400;\">25%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Above 5 Crore<\/span><\/td>\n<td><span style=\"font-weight: 400;\">37%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<table>\n<tbody>\n<tr>\n<td colspan=\"3\"><b>FOR COMPANIES<\/b><\/td>\n<\/tr>\n<tr>\n<td><b>TYPE OF COMPANY<\/b><\/td>\n<td><b>LIMIT OF INCOME<\/b><\/td>\n<td><b>SURCHARGE RATE<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Firm\/LLP\/Local authorities\/Co-operative Society<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Above the limit of \u20b91 Crore<\/span><\/td>\n<td><span style=\"font-weight: 400;\">12%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Domestic Company\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u20b91 &#8211; 10 Crore<\/span><\/td>\n<td><span style=\"font-weight: 400;\">7%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Domestic Company<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10 Crore +<\/span><\/td>\n<td><span style=\"font-weight: 400;\">12%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Foreign Organisation\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">\u20b91 &#8211; 10 Crore\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">2%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Foreign Organisation<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Above 10 Crore<\/span><\/td>\n<td><span style=\"font-weight: 400;\">5%\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400;\">Interestingly, companies in the Indian start-up sector are showing an increasing interest in neo-banking facilities for tax compliance measures regarding employee payroll management. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">For instance, with RazorpayX <\/span><a href=\"https:\/\/razorpay.com\/payroll\/\"><span style=\"font-weight: 400;\">payroll<\/span><\/a><span style=\"font-weight: 400;\">, it is easier for your employees to make their tax declarations via this platform\u2019s self-serve portal. The software enables you to calculate payroll and disburse salary in just a few clicks. RazorpayX also enables automated Tax payments from a single dashboard.<\/span><\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/?r=blog_cta_business_banking_surcharge_on_income_tax&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Explore RazorpayX<\/a><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_Is_Marginal_Relief_in_Surcharge_on_Income_Tax\"><\/span><strong>What Is Marginal Relief in Surcharge on Income Tax?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">According to the rules and regulations of the <a href=\"https:\/\/incometaxindia.gov.in\/Tutorials\/2%20Tax%20Rates.pdf\" rel=\"nofollow noopener\" target=\"_blank\">Income Tax<\/a> Act of India, an entity can be eligible for marginal relief if the generated income is above Rs 50 Lakh per annum. This relief amount is calculated as per the difference between the sum beyond the Rs 50L limit, and the excess tax and <\/span><b>surcharge on income tax<\/b><span style=\"font-weight: 400;\"> payable by this concerned authority.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To better elaborate, a specific example is considered. Suppose a business firm is paying a <\/span><b>surcharge on income tax<\/b><span style=\"font-weight: 400;\"> at the rate of 12% for earning Rs 1.01 Crore annually. In such an instance, two factors are considered:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For an earning of Rs 1 Crore, the payable tax amount would have been Rs 3120000.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, including the surcharge, this tax amount would be Rs 3224000.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Therefore, the firm may be subjected to pay off a subtotal of Rs104300 for turning in an extra income of Rs 100000. Such regulations can lead to a financial burden for an organisation. That is why it will be granted a marginal relief as:<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Relief amount: Rs 104000 &#8211; Rs 100000 = Rs 4000\/-<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_Can_RazorpayX_Help_Taxpayers\"><\/span><b>How Can RazorpayX Help Taxpayers?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><a href=\"https:\/\/razorpay.com\/x\/\"><span style=\"font-weight: 400;\">RazorpayX,<\/span><\/a><span style=\"font-weight: 400;\"> one of the leading neo-banking solution providers in this country, has been highly effective for the Indian start-up sector. For instance, with its advanced <\/span><a href=\"https:\/\/razorpay.com\/x\/tax-payments\/\"><span style=\"font-weight: 400;\">tax payments<\/span><\/a><span style=\"font-weight: 400;\"> feature, your business can get done with its diverse tax payments in a matter of a few clicks.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The platform provides a top-of-the-range dashboard that can automate different compliances of your business, such as paying its:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/razorpay.com\/blog\/tds-challan-281\/\"><span style=\"font-weight: 400;\">Tax Deducted at Source [TDS]<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/razorpay.com\/blog\/gst-a-complete-guide\/\"><span style=\"font-weight: 400;\">Goods and Services Tax [GST]<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/razorpay.com\/blog\/advance-tax-payment-essential-details\/\"><span style=\"font-weight: 400;\">Advanced tax<\/span><\/a><\/li>\n<\/ul>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/tax-payments\/?r=blog_cta_business_banking_surcharge_on_income_tax&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Explore RazorpayX Tax Payment<\/a><\/div>\n<p>Additionally,<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/razorpay.com\/x\"><span style=\"font-weight: 400;\"> RazorpayX<\/span><\/a><span style=\"font-weight: 400;\"> allows business owners to open<\/span><a href=\"https:\/\/razorpay.com\/x\/current-accounts\/?utm_source=direct&amp;utm_medium=website\"><span style=\"font-weight: 400;\"> current accounts<\/span><\/a><span style=\"font-weight: 400;\">,<\/span><a href=\"https:\/\/razorpay.com\/x\/tax-payments\/\"><span style=\"font-weight: 400;\"> pay taxes<\/span><\/a><span style=\"font-weight: 400;\">, schedule payments,<\/span><a href=\"https:\/\/razorpay.com\/x\/vendor-payments\/\"><span style=\"font-weight: 400;\"> pay vendors<\/span><\/a><span style=\"font-weight: 400;\"> seamlessly and check invoices from a single dashboard. This saves valuable time and effort.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is an accounting and banking platform that fills the gap between advanced banking solutions and finance professionals. It allows easy accounting software integration.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">With<\/span><a href=\"https:\/\/razorpay.com\/payroll\/\"><span style=\"font-weight: 400;\"> RazorpayX Payroll<\/span><\/a><span style=\"font-weight: 400;\">, businesses can automate salary payments and provide insurance policies to their employees<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span><strong>Frequently Asked Questions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div id=\"rank-math-rich-snippet-wrapper\"><div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-1\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">When was the surcharge on income tax introduced in India?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The Finance Act of 2013 introduced the concept of a surcharge on income tax in India.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-2\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">How can a small business avoid paying higher taxes?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>A small business can avoid paying the higher amount as income tax by adhering to certain procedures such as:<br \/>\n1. Paying for employee health insurance<br \/>\n2. Applying for Qualified Business Income [QBI] deduction<br \/>\n3. Being thorough about depreciation expenses, etc. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-3\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">Can you pay all of your TDS\/TCS payments at once via RazorpayX Tax Payments software?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Multiple TDS entries can be paid off via RazorpayX in a single sequence with the usage of a One Time Password [OTP]. <\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>In general terms, a surcharge is an extra amount charged over and above the original monetary value of a product or a service. In terms of taxation, a surcharge amount is the added sum levied on the tax payable by an entity.\u00a0 What Is a Surcharge on Income Tax? A surcharge on income tax is<\/p>\n","protected":false},"author":102,"featured_media":10862,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[27],"tags":[406],"class_list":{"0":"post-10858","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-banking","8":"tag-income-tax"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10858","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/102"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=10858"}],"version-history":[{"count":0,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/10858\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/10862"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=10858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=10858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=10858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}