What is the 7% surcharge?

When calculating the relief or tax liability for an individual or entity with an income exceeding Rs. 1 crore, the surcharge is factored in. The maximum additional tax due to the surcharge is capped at the amount of income exceeding the Rs. 1 crore mark.

In India's taxation system, there is a specific surcharge imposed on individuals and entities whose annual income surpasses a certain threshold. For those earning over Rs. 1 crore, a 7% surcharge is applicable on the excess amount.

This surcharge is an additional tax levied on top of the regular income tax rate, designed to ensure that those with higher incomes contribute a proportionately larger share to the nation's finances.

The implementation of this surcharge is intended to promote equity in taxation and ensure that those with greater financial means contribute more towards the country's development.

This mechanism ensures that taxpayers are not overburdened by the surcharge and are only required to pay additional tax on the portion of their income that falls above the threshold.