With Finance Minister Nirmala Sitharaman set to unveil the Union Budget for the fiscal year 2023-24 on February 1, here is the concept of surcharge simplified.
What is surcharge?
Surcharge is an additional charge levied on tax. It is levied on the tax payable and not on the income generated. For example, if your income is Rs 300, to which the tax is 20 per cent, and the surcharge is 15 per cent then the total tax burden of an individual would be 35 per cent.
Currently, surcharge is charged for individuals who earn more than Rs 50 lakhs to Rs 1 crore is 10 per cent, and is 15 per cent for the individuals that earn more than Rs 1 crore.
In the case of domestic companies, 7 per cent surcharge is charged to the companies that earn Rs 1 crore to Rs 10 crore, and 12 per cent to the companies that earn more than 10 crores.