Hi Team,
I have a doubt regarding income tax surcharge (10% for income > 50 Lac ); which as per my knowledge is considered if Net Taxable Income (after all deductions) exceeds 50 Lac. My question is do we consider 1 Lac LTCG relief also in the net taxable income or not? For example:
Salary income after all the deductions = 49,99,999 INR and LTCG is 10,000 INR.
Does this person has to pay Surcharge or not (as LTCG - 1 Lac relief is <= 0) ?
AFAIK, it is included in Total Income(Even if it is less than 1 lakh). So yes it would be included in the calculation of surcharge. You can verify it in the ITR tool.
@tarun2 Thanks! I also checked Income Tax Portal and can see that whole LTCG is being used to calculate surcharge.
What about STCG and Carry Forwarded Losses. Let say we have 49,50,000 INR income after all the deductions and exemptins. Plus we have 1 Lac STCG and 70,000 carry forwarded losses. Do we have to pay surcharge in this case? Or STCG will be added to income after setting-off carry forwarded losses?
In this case, I think first your losses will be set off. So only 1,00,000-70,000 = 30,000 will count towards your income, bringing total income to 49,80,000 and no surcharge.
Maybe @Quicko can confirm.
Hey @justdoit,
Yes, in this case, the LTCG will be added to your total income and surcharge will be applicable as the income would exceed ₹50L.
Moreover, as correctly mentioned by @tarun2, if you have any losses that are being set off, those will be first adjusted and then the total income will be calculated to determine if any surcharge is applicable.
Hope this clarifies.