CONCEPT OF MARGINAL RELIEF

Applicability of surcharge : surcharge is applicable as under
ASSESSEES                              APPLICABILITY                                                RATE
Domestic companies      total income exceeds Rs 1 Crore to 1o crore              5%
total income exceeds Rs. 10 crore                                2%
Concept of marginal relief
@ Relief shall be provided where tax payable together with surcharge exceeds the income earned by the domestic company in excess of Rs 1 crore,  such relief is known as marginal relief.
@ The additional amount of income tax payable with surcharge in excess of income over 1 crore should not be more than the amount  in excess of Rs. 1 crore.
For domestic company
Marginal relief  = A-(B+C)
A = tax on income including surcharge
B = (total income including surcharge  –Rs 1 crore )
C= tax on Rs 1 crore  excluding surcharge
S0 Tax payable = tax on total income including surcharge Less: ( marginal relief as computed above)

EXAMPLE :
UK Ltd  IS AN INDIAN COMPANY  WITH THE TAXABLE INCOME OF  Rs 1.02 CRORE  DURING THE AY 2015 -2016..
COMPUTATION OF MARGINAL RELIEF