Surcharge, cess and marginal relief
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Updated 03 Oct 2026
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AI summary
Surcharge slabs, the caps on capital gains and dividends, and how marginal relief protects you at the edges.
3 sections
Surcharge for individuals and HUFs
| Total income | Surcharge |
|---|---|
| ₹50 lakh – ₹1 crore | 10% |
| ₹1 – 2 crore | 15% |
| ₹2 – 5 crore | 25% |
| Above ₹5 crore | 37% (old regime) / 25% (new regime cap) |
- On dividends and capital gains on shares and equity funds, surcharge is capped at 15%.
- Cess: 4% on tax plus surcharge, for everyone.
Other taxpayers
| Taxpayer | Surcharge |
|---|---|
| Firms, LLPs, local authorities | 12% above ₹1 crore |
| Domestic company (normal rates) | 7% above ₹1 crore, 12% above ₹10 crore |
| Company on 22% concessional rate | Flat 10% |
Marginal relief
When income crosses a surcharge threshold by a small amount, the extra tax cannot be more than the extra income. Example: income of ₹50.10 lakh cannot cost more than ₹10,000 extra tax compared with ₹50 lakh. The same idea applies just above the ₹12 lakh rebate limit in the new regime.
Sources
PreviousNew regime vs old regime: how to choose Next in Tax Rates & Regimes Tax rates for firms, LLPs, companies and MAT
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