What is marginal relief and how it is computed?

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....an the amount of income that exceeds Rs. 50 lakh. In case of a company, surcharge is levied @ 7% (2% in case of foreign company) on the amount of income-tax if the total income exceeds Rs. 1 crore but does not exceed Rs. 10 crore and @ 12% (5% in case of foreign company) on the amount of income-tax if total income exceeds Rs. 10 crore. Hence, in case of company whose total income exceeds Rs. 1 crore but does not exceeds Rs. 10 crore, marginal relief will be computed as discussed above, but in the case of company having total income above Rs. 10 crore marginal relief is available in such a manner that the net amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax and surcharge on total income of R....

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....,000 but upto Rs. 10,00,000 * 30% for income above Rs. 10,00,000. Apart from above rates, cess will be computed separately. (2) Tax liability under marginal relief (i.e. after marginal relief) Tax on Rs. 50 lakh (at the above discussed rates) 13,12,500 Add: Income above Rs. 50 lakh 1,00,000 Tax liability under marginal relief 14,12,500 Conclusion Normal tax liability (i.e. without marginal relief) comes to Rs. 14,76,750 and tax liability under marginal relief comes to Rs. 14,12,500. It can be observed that tax liability under marginal relief is lower and, hence, Rs. 14,12,500 will be the tax liability before cess. Total tax liability will be computed as follows: Rs. Tax liability after marginal relief (*) 14,12,500 Add: He....

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....ax liability after surcharge (i.e., normal tax liability) 33,03,375 (*) The normal tax rates for the financial year 2023-24 applicable to an individual below the age of 60 years are as follows: * * Nil upto income of Rs. 2,50,000 * 5% for income above Rs. 2,50,000 but upto Rs. 5,00,000 * 20% for income above Rs. 5,00,000 but upto Rs. 10,00,000 * 30% for income above Rs. 10,00,000. Apart from above rates, cess will be computed separately. (2) Tax liability under marginal relief (i.e. after marginal relief) Tax on Rs. 1 crore (at the above discussed rates) 28,12,500 Add: Surcharge on income-tax @ 10% (if income is Rs. 1 crore) 2,81,250 Add: Income above Rs. 1 crore 2,00,000 Tax liability under marginal relief 32,93,750....