JANUARY 29, 2018

By Aditya Mohan, CS

Issue:

- As per the provisions vis-a-vis Marginal Relief, "the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on such income by more than the amount of income that exceeds such income".

- Marginal relief does not cover the impact of cess.

- As a result, the assessee's in-hand income (i.e. after tax) is lesser than what would be his in-hand income had his total income been equal to total income after which surcharge becomes applicable . Kindly refer to enclosed excel sheet for examples.

Suggestion:

- The provision of marginal relief should be rewritten as:

"Provided that in the case of persons mentioned above having total income exceeding, -

- ……………………., the total income payable as income-tax, surcharge, education cess and secondary & higher education cess on such income shall not exceed the total amount payable as income-tax ………………………