Surcharge & Health and Education Cess Calculator
Once total income crosses ₹50 lakh, the income tax itself is taxed again — that is what a surcharge is. On top of tax plus surcharge, every taxpayer pays a 4% Health and Education Cess. This calculator computes the surcharge rate applicable to your income, applies marginal relief so that a small rise in income does not cause a disproportionate jump in tax, and adds the cess to arrive at the final liability.
Surcharge rates for individuals, HUF, AOP and BOI
- Total income above ₹50 lakh up to ₹1 crore — 10%
- Above ₹1 crore up to ₹2 crore — 15%
- Above ₹2 crore up to ₹5 crore — 25%
- Above ₹5 crore — 37% (old regime) / 25% (new regime cap under s.115BAC)
Surcharge on dividend income and on capital gains taxed under sections 111A, 112 and 112A is capped at 15% irrespective of the income level. Firms and LLPs pay 12% surcharge above ₹1 crore; domestic companies pay 7% above ₹1 crore and 12% above ₹10 crore (flat 10% under 115BAA/115BAB).
Marginal relief
The total of tax and surcharge on income exceeding a threshold cannot exceed the tax and surcharge payable on income exactly at the threshold plus the amount of income above the threshold. The calculator computes this cap automatically.
Worked example
Taxable income ₹52,00,000 under the new regime (FY 2025-26). Slab tax = ₹11,40,000. Surcharge at 10% = ₹1,14,000, total ₹12,54,000. At exactly ₹50 lakh the tax would be ₹10,80,000 with no surcharge; income has risen by ₹2,00,000, so the cap is ₹12,80,000 — no relief needed here. At ₹50,50,000, however, tax ₹10,95,000 + surcharge ₹1,09,500 = ₹12,04,500 exceeds the cap of ₹11,30,000, so marginal relief of ₹74,500 is given and total tax becomes ₹11,30,000 + 4% cess = ₹11,75,200.
Why the new regime matters for high earners
Above ₹5 crore the old regime's 37% surcharge pushes the effective top rate to 42.74%, while the new regime's 25% cap gives 39%. For very high incomes with few deductions, this alone can make the new regime cheaper.
Frequently Asked Questions
At what income does surcharge start?
Surcharge applies to individuals when total income exceeds ₹50 lakh — 10% of the income tax. It rises to 15% above ₹1 crore, 25% above ₹2 crore and 37% above ₹5 crore (25% maximum in the new regime).
What is marginal relief on surcharge?
It ensures that the extra tax plus surcharge caused by crossing a threshold is not more than the extra income. For income just above ₹50 lakh, the surcharge is reduced so total tax does not exceed tax at ₹50 lakh plus the excess income.
Is cess calculated on tax or on tax plus surcharge?
Health and Education Cess at 4% is charged on the aggregate of income tax and surcharge (after marginal relief).
Is surcharge on capital gains capped?
Yes. Surcharge on LTCG u/s 112/112A, STCG u/s 111A and dividend income cannot exceed 15% even if your total income is above ₹2 crore.
Disclaimer: This tool is for general information and estimation only. Tax rates and rules change — verify with official sources or a professional before acting. Read full disclaimer.