About the Income Tax Surcharge & Marginal Relief Calculator
This calculator works out the income tax surcharge payable by individuals and HUFs in India whose total income crosses ₹50 lakh, and the marginal relief that stops the surcharge from costing more than the income that pushed you over a threshold. It covers tax year 2026-27 (FY 2026-27), the first year under the Income-tax Act, 2025, and the same rates applied in FY 2025-26 because the Finance Bill 2026 left them unchanged.
Enter your total taxable income (after deductions) and choose the new or old regime. The tool calculates slab tax, the surcharge rate that applies — 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore and, in the old regime only, 37% above ₹5 crore — then caps the surcharge with marginal relief and adds the 4% health and education cess.
It is useful for salaried professionals, business owners and investors whose income sits just above a surcharge threshold, where marginal relief can be worth lakhs. It assumes all income is taxed at normal slab rates; capital gains and dividends taxed at special rates have their surcharge capped at 15%, which this tool does not model separately.
With the default inputs, the total tax payable (incl. surcharge & cess) is ₹1,227,200.00. Change any value above to recalculate instantly.
How to use the income tax surcharge & marginal relief calculator
- 1Enter your total taxable income after deductions.
- 2Choose the new or old tax regime (and your age for old-regime slabs).
- 3Read the surcharge rate and the surcharge before relief.
- 4Check the marginal relief line to see how much the cap saves you.
- 5Use the total, including 4% cess, for advance tax or return planning.
Formula and method
Slab tax is computed first: under the new regime nil to ₹4 lakh, then 5%, 10%, 15%, 20% and 25% in ₹4 lakh steps and 30% above ₹24 lakh; under the old regime nil to ₹2.5 lakh (₹3 lakh at 60+, ₹5 lakh at 80+), 5% to ₹5 lakh, 20% to ₹10 lakh and 30% above. The surcharge rate depends on total income: 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore, and 37% above ₹5 crore in the old regime only (the new regime stops at 25%).
Marginal relief limits tax plus surcharge to the tax plus surcharge payable at the threshold (T) plus the income earned above that threshold. So if your income is ₹1 lakh over ₹50 lakh, your tax cannot rise by more than ₹1 lakh compared with earning exactly ₹50 lakh. The 4% health and education cess is then added to tax plus surcharge.
- Tax
- Income tax on slabs for your total income
- T
- The surcharge threshold you crossed (₹50 lakh, ₹1 crore, ₹2 crore or ₹5 crore)
- prev rate
- Surcharge rate that applies just below T (0%, 10%, 15% or 25%)
Worked examples
₹51 lakh income — marginal relief applies (new regime)
Slab tax on ₹51 lakh is ₹11,10,000, so a 10% surcharge would be ₹1,11,000. At exactly ₹50 lakh the tax is ₹10,80,000, so tax plus surcharge may not exceed ₹10,80,000 + ₹1,00,000 = ₹11,80,000. Surcharge is capped at ₹70,000 (relief ₹41,000) and cess brings the total to ₹12,27,200.
₹1.01 crore income — 15% band with relief (new regime)
Slab tax is ₹26,10,000 and a 15% surcharge would be ₹3,91,500. At exactly ₹1 crore, tax of ₹25,80,000 plus 10% surcharge is ₹28,38,000; adding the ₹1,00,000 excess caps tax plus surcharge at ₹29,38,000, so surcharge is limited to ₹3,28,000. With 4% cess the total is ₹30,55,520.
₹6 crore income under the old regime — 37% surcharge
Old-regime slab tax on ₹6 crore is ₹1,78,12,500. Income is well past ₹5 crore, so the full 37% surcharge of ₹65,90,625 applies with no marginal relief; with cess the total is ₹2,53,79,250. The new regime would cap the surcharge at 25%.
Frequently asked questions
What are the income tax surcharge rates for FY 2026-27?+
For individuals and HUFs: 10% when total income exceeds ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore, and 37% above ₹5 crore under the old regime only. Under the new regime the surcharge is capped at 25%.
What is marginal relief on surcharge?+
Marginal relief ensures that the extra tax and surcharge caused by crossing a threshold never exceeds the extra income. If you earn ₹10,000 above ₹50 lakh, your total tax before cess can rise by at most ₹10,000 compared with earning exactly ₹50 lakh.
Is surcharge charged on capital gains and dividends?+
Yes, but the surcharge on tax attributable to dividends and on capital gains taxed at special rates (listed shares and equity funds, and other long-term gains) is capped at 15%, and that income is excluded when testing the 25% and 37% thresholds. This calculator assumes all income is taxed at slab rates.
Is cess charged on surcharge?+
Yes. The 4% health and education cess is calculated on income tax plus surcharge (after marginal relief), so a higher surcharge also increases the cess.
Does the new regime ever have a 37% surcharge?+
No. Under the new regime (now section 202 of the Income-tax Act, 2025, previously section 115BAC) the highest surcharge rate is 25%, which makes the new regime especially attractive for incomes above ₹5 crore.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.