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ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
An income tax surcharge is an important tax levied on the calculated income of any individual. The surcharge rates can vary depending on the income bracket.
In India, the concept of income tax surcharge based on taxpayer categorization was introduced in the Finance Act 2013. The Finance Act 2016 further increased surcharge rates for the financial year 2016-17. These rates vary depending on factors like the company or individual’s specific tax category.
A surcharge is an additional fee levied on top of the original price of a good or service. It is often added to the existing tax and is not included in the advertised price, making the final cost higher for the consumer.
Surcharges can be classified into two types, namely fixed amount and percentage. A fixed amount surcharge is a specific flat amount added to the cost, regardless of the original price. On the other hand, a percentage surcharge is a calculated amount based on a percentage of the original price.
An income tax surcharge is an additional tax levied on top of the calculated income tax, not on the income itself. Different tax rates apply to different income brackets, and there are also different categories of taxpayers, subject to varying surcharge percentages.
Before calculating your income tax liability, various deductions are applied to the income based on different categories. After these deductions, your income falls into a specific tax bracket, determining the applicable surcharge rate.
For the fiscal year 23-24 surcharge rate for an Individual (resident or non-resident), HUF, Association of Persons, Body of Individuals, or any other artificial juridical person is as follows:
Range of Income |
Surcharge levied |
₹50 Lakhs to ₹1 Crore |
10% |
₹1 Crore to ₹2 Crores |
15% |
₹2 Crores to ₹5 Crores |
25% |
Above ₹5 crore |
37% |
Also, the following changes are made for the surcharge levied:
Partnership firms, including LLPs, are taxed at a flat rate of 30% of their total income. Additional levies include:
There are numerous legal ways to reduce your tax burden in India. Here are some of the most popular and effective options:
Surcharges can significantly impact your financial obligations. Understanding their different forms, particularly in the context of income tax, is crucial for informed decision-making. Remember, income tax itself is not subject to a surcharge; rather, the calculated income tax amount is what gets the additional percentage added. By understanding surcharges and actively exploring tax-saving strategies, you can navigate your financial obligations more effectively and optimize your financial well-being.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
