Tax on more than 50L Income
Can someone explain to me how exactly does the tax work once ur yearly income exceeds 50L?
As I understand, currently there is a surcharge on tax, but there is also surcharge relief as well? I read some articles online and was surprised to learn that surcharge is applied on the total tax you pay, not on the extra earnings above 50L (unlike tax slabs).
I have some (probably dumb) questions on the topic, hope someone can help.
- Is amount of 50L on total income or on total taxable income (after various deductions)
- If I understand the marginal relief correctly, if two people have income as 50L and 51L, both of them will essentially have same post tax income because you will be paying the complete extra 1L as tax?
- Are there other things I should be aware of regarding this?
I appreciate any help you can provide, thank you!
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Bro, if this is the salary, don't spend time in the calculation, just get in touch with CA he will take 1500 bucks from you and all the PAIN will be his.
You just take some beer 🍺 and chill Maadi. 🤗
It gets even more confusing with the new vs old tax regime. Look forward to someone clarifying this
I believe the surcharge is same between 50L to 1cr for both old and new regimes, but yeah it gets hella confusing once you include everything and try to calculate how much you owe the govt for all your hardwork 😂😂
Though your question was bit confusing to me but watever I understood-
- Income tax is always computed on taxable income, that’s the reason for nomenclature.
- Yes, 51L guy would have marginally high total tax and will get relief (usually ~ < 1L )
- Have fun!
If the amount of surcharge exceeds the salary in excess of 50L, then you’ll get what they term as “marginal relief”.
Example: your income tax surcharge is 90k but income in excess of 50L is only 50k. In this case you’ll only need to pay 50k as surcharge and not 90k