Surcharge on income tax is payable if taxable income of a taxpayer exceeds a specified threshold limit during the AY 2023-24, like Rs 50 lacs in the case of individuals, HUF, AOP, BOI, AJP and Rs 1 crore in the case of companies, firms, cooperative societies, local authorities, etc.
Further, different surcharge rates are applicable for different types of persons or taxpayers, like individuals, HUF, AOP, BOI, AJP, firms, cooperative societies, local authorities, domestic or foreign companies, etc.
For Individuals, HUFs, AOPs, BOIs and AJPs:
The rates of surcharge on income tax applicable in the case of individuals (irrespective of residential status, age or tax regime), HUFs, associations of persons (AOPs), bodies of individuals (BOIs) and artificial juridical persons (AJPs) for AY 2023-24 are as follows:
| Taxable Income | Income Tax Surcharge Rate |
| (i) Above Rs 50 lacs but up to 1 crore (including the income by way of dividend or under the provisions of Sections 111A and 112A) | 10% |
| (ii) Above Rs 1 crore but up to 2 crore (including the income by way of dividend or under the provisions of Sections 111A and 112A) | 15% |
| (iii) Above Rs 2 crore but up to 5 crore (excluding the income by way of dividend or under the provisions of Sections 111A and 112A) | 25% |
| (iv) Above Rs 5 crore (excluding the income by way of dividend or under the provisions of Sections 111A and 112A) | 37% |
| (v) Above Rs 2 crore (including the income by way of dividend or under the provisions of Sections 111A and 112A) but not covered under (iii) or (iv) above | 15% |
In other words, the amount of income-tax for such individual assessees shall attract 10%, 15%, 25% & 37% surcharge in case total income exceeds Rs 50 lacs, Rs 1 Crore, Rs 2 Crore & Rs 5 Crore respectively. However, marginal relief from the income tax surcharge will be available.
Further, the amount of income tax plus surcharge shall attract a 4% “Health and Education Cess.” It may be noted that no marginal relief shall be available in respect of the amount of the Health and Education Cess.
Note: i) The surcharge shall be at the rates provided in (i) through (iv) above for all categories of income without excluding dividends or capital gains in the event that some part of the income is taxable under sections 115A, 115AB, 115AC, 115ACA, and 115E of the Income Tax Act of 1961.
ii) From AY 2023-24, in the case of AOPs consisting of companies only as it’s members, the surcharge rate shall be capped at 15%, as per Finance Act, 2022.
For Firms, LLPs, Co-operative Societies and Local Authorities:
The rates of surcharge on income tax applicable in the case of partnership firms (including LLPs), co-operative societies and local authorities for AY 2023-24 are as follows:
| Taxable Income | Income Tax Surcharge Rate |
| Above Rs 1 Crore and up to 10 crore | 12% (7% in the case of co-operative societies other than those opting for section 115BAD from AY 2023-24) |
| Above Rs 10 crore | 12% |
In other words, the amount of income tax for firms, cooperative societies and local authorities shall attract a 12% surcharge in cases where total income exceeds Rs 100 lacs. However, marginal relief from the income tax surcharge will be available.
Further, the amount of income tax plus surcharge shall attract a 4% “Health and Education Cess.” However, no marginal relief shall be available with respect to the Health and Education Cess.
Note: On satisfaction of certain conditions, a co-operative society resident in India has the option to pay tax at the rate of 22% as per the provisions of Section 115BAD. The surcharge would be at 10% on such a tax.
For Domestic Companies:
The rates of surcharge on income tax applicable in the case of domestic companies for AY 2023-24 are as follows:
| Taxable Income | Income Tax Surcharge Rate |
| Above Rs 1 crore but up to Rs 10 crore | 7% |
| Above Rs 10 crore | 12% |
In other words, the amount of income tax for domestic companies shall attract a 7% surcharge in cases where total income exceeds Rs 1 crore but is up to 10 crore, and a 12% surcharge in cases where total income exceeds Rs 10 crore. However, marginal relief from the income tax surcharge will be available.
Further, the amount of income tax plus surcharge shall attract a 4% “Health and Education Cess.” However, no marginal relief shall be available with respect to the Health and Education Cess.
Note: where the domestic company exercises the option under Section 115BAA or 115BAB, the computed tax is increased by a 10 percent surcharge for every level of income.
For Foreign Companies:
The rates of surcharge on income tax applicable in the case of foreign companies for AY 2023-24 are as follows:
| Taxable Income | Income Tax Surcharge Rate |
| Above Rs 1 crore but up to 10 crore | 2% |
| Above Rs 10 crore | 5% |
In other words, the amount of income tax for foreign companies shall attract a 2% surcharge in cases where total income exceeds Rs 1 crore but up to 10 crore and a 5% surcharge in cases where total income exceeds Rs 10 crore. However, marginal relief from the income tax surcharge will be available.
Further, the amount of income tax plus surcharge shall attract a 4% “Health and Education Cess.” However, no marginal relief shall be available with respect to the Health and Education Cess.
Related Posts: >> Finance Act, 2022 >> Finance Act, 2023 >>