Marginal Relief

Started by TechShristi, November 15, 2014, 09:15:42 pm

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TechShristi

November 15, 2014, 09:15:42 pm Last Edit: November 15, 2014, 09:32:03 pm by TechShristi
What is Marginal Relief:
Adjustment in the amount of income tax payable by a firm whose taxable income is just over the upper limit of a tax bracket.

For Example:

 

Without Surcharge

 

Remarks

 

With Surcharge

Remarks

 

 

 

 

 

 

Income

1000000

 

 

10001000

 

Income Tax

2830000

 

 

28302830

 

Surcharge

0

Since amount is not greater than 1 cr.

 

2830283

Since Income is greater than One Cr.

Cess

1149000

 

 

84908.49

 

 

4979000

 

 

41219021.49

 

 

 

 

 

 

 

 

 

36240021.49

 

 

 

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Here Income increase by Rs. 100, but by increase in Rs.100, there is increase in tax liability due to surcharge. This is unfair and that's why marginal relief is given.

So, to avoid this, Marginal relief is provided.

For proper formatting of the above table check out the below image attachment.

TechShristi

November 15, 2014, 09:15:42 pm Last Edit: November 15, 2014, 09:32:03 pm by TechShristi

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