How is a surcharge levied?

One of the important points to be noted here is that the surcharge is levied as a percentage of taxes and not of income whereas taxes are levied on income earned. Basically, we can say that surcharge is a tax on tax.


What is the rate of surcharge for an Individual, HUF, AOP, BOI & AJP?

For

  • A resident Individual aged less than 60 years
  • A resident Individual aged 60 years & above but less than 80 years (Resident senior citizen)
  • A resident Individual aged 80 years & above (Resident super senior citizen)
  • Non-resident individual
  • Hindu Undivided Family (HUF)
  • Association of Persons (AOP)
  • Body of Individuals (BOI)
  • Artificial juridical person (AJP)

the surcharge is applicable as under

Total income Surcharge Rate
FY 2020-21 & FY 2019-20 FY 2018-19
Upto Rs 50 Lakhs NIL NIL
From Rs 50 Lakhs - Rs 1 Crore 10% of Income Tax  10% of Income Tax 
Above Rs 1 Crore - Rs 2 Crore 15% of Income Tax 15% of Income Tax
Above Rs 2Crore - Rs 5Crore 25% of Income Tax 15% of Income Tax
Above Rs 5 Crore 37% of Income Tax 15% of Income Tax

What is the rate of surcharge for Partnership Firm, Cooperative Society and Local Authorities?

For

  • Partnership Firm
  • Limited Liability Partnership
  • Co-operative Society or
  • Local Authorities

The surcharge is applicable at same rates for the Financial Year 2020-21 (AY 2021-22), Financial Year 2019-20 (AY 2020-21), Financial Year 2018-19 (AY 2019-20) as under

Total income Surcharge Rate
FY 2020-21, FY 2019-20 & FY 2018-19
Upto Rs 1 Crore NIL
Above Rs 1 Crore 12% of Income Tax

What is the surcharge rate for Indian (Domestic) companies?

For Domestic companies, the surcharge rates in India for the Financial Year 2020-21 (AY 2021-22), Financial Year 2019-20 (AY 2020-21), Financial Year 2018-19 (AY 2019-20) shall apply as under

Total income Surcharge Rate
FY 2020-21, FY 2019-20 & FY 2018-19
Upto Rs 1 Crore NIL
Above Rs 1 Crore - 10 Crore 7% of Income Tax
Above Rs 10 Crore 12% of Income Tax

Note:
In case of domestic companies opting for section 115BAA or manufacturing domestic companies opting for section 115BAB, the applicable rate of the surcharge shall be 10%
As an option given in Budget 2020 if the power generating manufacturing units opt for Section 115BAB for payment of taxes at 15% then the rate of surcharge in this case would be 10%.


What is the rate of surcharge for Foreign companies?

For companies other than Domestic company, the surcharge shall apply for the Financial Year 2020-21 (AY 2021-22), Financial Year 2019-20 (AY 2020-21), Financial Year 2018-19 (AY 2019-20) at the following rates

Total income Surcharge Rate
FY 2020-21, FY 2019-20 & FY 2018-19
Upto Rs 1 Crore NIL
Above Rs 1 Crore - 10 Crore 2% of Income Tax
Above Rs 10 Crore 5% of Income Tax

surcharge for Foreign companies

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Frequently Asked Questions

Q- What is the difference between Surcharge and Cess?

Surcharge and cess are both extra levies over and above income tax. But, the basic difference between surcharge and cess lies in their rates, and calculation. On the basis of both, we can evaluate the said terms as

Revenue Sharing The surcharge is calculated on income tax and cess is applicable to income tax + Surcharge
Calculation The surcharge is calculated as per differential rates as explained above in case of individuals, companies and other assessees whereas Health and Education Cess is applicable at a standard rate 4% from the Financial Year 2018-19in case of all assessees.

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CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.