IT Surcharge

Share This Thread
  1. SJS13011986

    SJS13011986 New Member

    in the example on your website, it then means that whether I earn 1cr Rs, or 1.02 cr Rs - it will make no difference to my actual income, as the 2L rs I earned extra (due to working overtime!) is COMPLETELY taken away as tax. How is this legal?
    Should the surcharge be not applicable only ON the income that is ABOVE 1cr?
  2. ZED

    ZED Well-Known Member

    As per Article 271 of the constitution-
    "Notwithstanding anything in articles 269 and 270, Parliament may at any time increase any of the duties or taxes referred to in those articles by a surcharge for purposes of the Union and the whole proceeds of any such surcharge shall form part of the Consolidated Fund of India."

    270. (1) All taxes and duties referred to in the Union List, except the duties and taxes referred to in articles *[268 and 269], respectively, surcharge on taxes and duties referred to in article 271 and any cess levied for specific purposes under any law made by Parliament shall be levied and collected by the Government of India and shall be distributed between the Union and the States in the manner provided in clause (2). (2) Such percentage, as may be prescribed, of the net proceeds of any such tax or duty in any financial year shall not form part of the Consolidated Fund of India, but shall be assigned to the States within which that tax or duty is leviable in that year, and shall be distributed among those States in such manner and from such time as may be prescribed in the manner provided in clause (3).

    Central Govt has power to collect Income tax under Entry No. 82 of the Union List to Constitution of India.
    Surcharge is also a part of Income Tax and Income tax can be charged on some basis like slab basis for individual, Maximum marginal rate , flat rates , etc. Further these rates and basis can be altered as per the power conferred by the Constitution of India.

    Under Income Tax Act,1961 , wherever surcharge has been levied , you will find the phrase "....such tax shall be increased by a surcharge, for purposes of the Union, calculated in each case in the manner provided therein......."

    Please note, the above case is covered under marginal relief. Had the marginal relief not provided then tax would have been even more.
Draft saved Draft deleted
Similar Threads Forum Date
why do GOI impose surcharge on income tax? Income Tax Nov 3, 2016
Surcharge for AY 2016-17 for Firms Income Tax Aug 3, 2016
dividend tax surcharges Income Tax Jul 18, 2016
Surcharge on TDS Income Tax Apr 8, 2016
Cess and Surcharge for claiming MAT Credit? Income Tax Mar 16, 2016