Surcharge is levied in addition to taxation and Cess. The basic purpose for introduction of surcharge in addition to tax and Cess is to shift the tax from the lower income group to the high income and privileged ones as surcharge is levied only after a certain limit of income. Thus, if surcharge is levied on all the taxpayers i.e., if it is included in the tax base, then all the taxpayers would have to pay this additional tax. Thus, it is charged separately.
Surcharge is charged at the following percentages:
In case of Indian Companies, surcharge is charged at 7% of the amount of income tax in case where the income exceeds INR 1 crore but does not exceed INR 10 crore and is charged at 12% in case where the income exceeds INR 10 crore.
In case of Foreign Companies, surcharge is charged at 2% of the amount of income tax in case where the income exceeds INR 1 Crore but does not exceed INR 10 Crore and is charged at 5% in case where the income exceeds INR 10 crore.
In case of individual/HUF/AOP/BOI/Artificial Jurisdiction Person, surcharge is charged at 10% of the amount of income tax in case where the income exceeds INR 50 lakh but does not exceed INR 1 Crore, 15% of the amount of income tax in case where the total income exceeds INR 1 crore but does not exceed INR 2 crore, 25% of the income tax in case where the total income exceeds INR 2 crore but does not exceed INR 5 crore and 37% in case where the total income exceeds INR 5 crore.
In case of Firm/ Co-operative society and Local Authority, surcharge is charged at 12% of the total amount of tax if the income exceeds INR 1 crore.
