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Surcharge

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	A surcharge &mdash; or additional charge &mdash; is essentially a tax levied on a tax. It is calculated on payable tax, not on income generated. So a surcharge of, say, 10 per cent on an existing tax rate of 30 per cent effectively raises the total tax rate to 33%. For example, if a tax is imposed at 30 per cent on an income of Rs 100, the total payable tax would be Rs 30. Then, a surcharge of 10 per cent calculated on Rs 30 would amount to Rs 3. So, the effective payability would be Rs 30 + Rs 3 = Rs 33.</div>
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	Union Budget 2019, while keeping surcharge unchanged for some high-income groups, raised it for ultra-high-networth individuals. For those with an annual income in the range of Rs 50 lakh to Rs 1 crore, the surcharge of 10 per cent was kept unchanged from the previous year. Similarly, those earning Rs 1 crore to Rs 2 crore yearly also had to pay the same surcharge as the previous year; ie, 15 per cent. An increase in surcharge, however, was announced for the following income groups:</div>
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		A surcharge of 25 per cent is now charged for those with annual income between Rs 2 crore and Rs 5 crore for FY20.</li>
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		A surcharge of 37 per cent is charged on annual income in excess of Rs 5 crore for FY20.</li>
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	The earlier surcharge on income-tax, capped at 15 per cent, is applicable for the current assessment year 2019-20. The new rates are applicable on income earned in FY20; ie AY 2020-21. As a result of the increase in surcharge, the effective tax rate for individuals in the Rs 2 crore to Rs 5 crore per year income bracket will be 39 per cent for FY20. Similarly, the effective tax rate for individuals earning Rs 5 crore or more will be 42.7 per cent for FY20.</div>
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	Earlier, a surcharge of 10 per cent was levied on individuals whose total income exceeded Rs 1 crore. This rate was hiked to 12 per cent in Union Budget 2015, and further to 15 per cent in the Union Budget 2016. The 2017 Budget imposed a surcharge on those with income above Rs 50 lakh. Companies with income above Rs 1 crore were also made liable to pay surcharge.</div>

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What is Surcharge, Surcharge Meaning, Budget News, Surcharge Definition

What is Surcharge?

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	Income tax is a direct tax that a government levies on the income of its citizens. The Income Tax Act, 1961, mandates that the central government collect this tax. The government can change the income slabs and tax rates every year in its Union Budget.&nbsp;</div>
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	Income does not only mean money earned in the form of salary. It also includes income from house property, profits from business, gains from profession (such as bonus), capital gains income, and &#39;income from other sources&#39;. The government also often provides certain leeway such that various deductions are made from an individual&#39;s income before the tax to be levied is calculated.&nbsp;</div>
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	<strong>Income Tax Returns</strong></div>
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	Income Tax Returns (ITR) form are the basis of calculating a person&#39;s income tax. It is a statement showing the status of a person, all their sources of revenue, deductions and, lastly, the tax payable or tax refund, if any.&nbsp;</div>
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	<strong>Income Tax slabs</strong></div>
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	What income tax rate a person pays depends on the slab they fall in. The government has categorised incomes into slabs like &mdash; up to Rs 250,000, Rs 250,000-Rs 5,00,000, Rs 5,00,000-Rs 1 million, and more than Rs 1 million. The rates on different slabs might be different based on age groups.</div>
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	<strong>Standard deduction</strong></div>
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	Tax on some components of income can be waived by the government. These tax reliefs are known as standard deductions.</div>

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What is Income Tax, Income Tax Planning, IT Returns, Income Tax Slabs

Income tax

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	A cess is a form of tax levied by the government on tax with specific purposes till the time the government gets enough money for that purpose. Different from the usual taxes and duties like excise and personal income tax, a cess is imposed as an additional tax besides the existing tax (tax on tax). For example, the Swachh Bharat cess is levied by the government for cleanliness activities that it is undertaking across India.</div>
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	A cess, generally paid by everyday public, is added to their basic tax liability paid as part of total tax paid.</div>
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	<strong>Difference between tax and cess</strong></div>
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	A cess is different from taxes as it is imposed as an additional tax besides the existing tax (tax on tax). Another difference lies in the way the revenue recovered from cess is maintained. While revenue from taxes like income tax is kept in the Consolidated Fund of India (CFI) and the government can use it for any purposes it deems fit, the revenue coming from cess is first credited to the Consolidated Fund, and the government may then, after due appropriation from Parliament, utilise it for the specified purpose.</div>
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	Another major difference between central taxes and cess is that the proceeds of a cess may or may not be shared with the state governments, while that of taxes have to be shared.</div>
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	<strong>Various types of cesses levied by the government</strong></div>
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	The government levies different cesses on services it provides to the public. Some of them are as follows:</div>
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	<strong>Education cess: </strong>Collected by the government to provide the mandatory free standard primary education to all citizens.</div>
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	<strong>Health cess:</strong> Proposed in 2018 by former finance minister Arun Jaitley to meet the health requirements of below-poverty-line families.&nbsp;&nbsp;</div>
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	<strong>Road cess or fuel cess: </strong>For maintenance of roads and infrastructure.</div>
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	<strong>Clean energy cess: </strong>Introduced in 2010, it is a carbon tax on the production and import of coal, lignite and peat, operating on the &ldquo;polluter pays&rdquo; principle.</div>
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	<strong>Krishi Kalyan cess:</strong> It was introduced in 2016 to provide additional support to farmers for agricultural activities.</div>
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	<strong>Swachh Bharat cess:</strong> Introduced in 2014 with the objective of delivering a clean India, it is levied at 0.5 per cent on all taxable services to fund Swachh Bharat initiatives.</div>
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What is Cess, Cess News, Cess Definition

Cess

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	Taxation is the primary source of income for the government. The most important revenue receipts for the government, taxes are involuntary fees levied on individuals and corporations to finance government activities. Revenue receipts can be of two types &mdash; non-tax revenue and tax revenue. Tax revenue is the income gained by the government through taxation.</div>
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	Tax revenue forms a part of the Receipt Budget, which in turn is part of the Annual Financial Statement of the Union Budget.</div>
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	Tax revenue is the result of the application of a tax rate to a tax base. Total tax revenue as a percentage of GDP indicates the share of the country&#39;s output collected by the government through taxes. Tax revenue can be regarded as one measure of the degree to which the government controls the economy&#39;s resources.</div>
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	Taxes collected from both direct tax and indirect tax are the government&rsquo;s tax revenue. It includes collections from income tax, corporation tax, customs, wealth tax, tax on land revenue, etc.</div>
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	Direct tax is the tax that is paid directly to the government by the person or company on whom it is levied. Income tax, wealth tax, corporation tax and property tax are some examples of direct tax. Indirect taxes are those that are collected by intermediaries from individuals and corporations who bear the burden of the tax and passed on to the government. Goods and Services Tax (GST) is an example of indirect tax. Corporation tax forms a large chunk of the government&rsquo;s tax revenue.</div>
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Surcharge

What is Surcharge?

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