Marginal Relief & Surcharge Calculator
Marginal Relief ensures that the increase in income tax is not more than the increase in income exceeding surcharge thresholds (тВ╣50L, тВ╣1Cr, etc.). This calculator instantly computes the relief for the AY 2027-28 under both New and Old tax regimes.
Instantly calculate your Income Tax liability, Surcharge, and Marginal Relief. Support for both New (Section 115BAC) and Old Tax Regimes for Financial Year 2026-27 (AY 2027-28).
What is Marginal Relief?
Marginal Relief is a relief provided by the Income Tax Department to ensure that the increase in income tax (including surcharge) does not exceed the increase in income beyond a certain threshold.
In India, surcharges apply when your income exceeds specific limits (e.g., тВ╣50 Lakhs, тВ╣1 Crore, тВ╣2 Crores, etc.). If your income is just slightly above these thresholds, the tax increase could be more than the extra income earned. Marginal relief prevents this unfair situation.
Key Surcharge Thresholds (FY 2026-27):
- Above тВ╣50 Lakhs: 10% Surcharge
- Above тВ╣1 Crore: 15% Surcharge
- Above тВ╣2 Crores: 25% Surcharge (New Regime max capped at 25%)
- Above тВ╣5 Crores: 37% Surcharge (Old Regime only)
Use the form to calculate your exact tax, applicable surcharge, and the marginal relief you are entitled to.
Understanding Marginal Relief
Marginal Relief is a tax benefit provided by the Income Tax Department to ensure that the additional tax you pay (due to surcharge) does not exceed the actual income you earned above the threshold.
When your income slightly exceeds the surcharge thresholds (тВ╣50 Lakhs, тВ╣1 Crore, тВ╣2 Crores), the surcharge is applied to the entire tax amount. This creates a scenario where a small increase in income leads to a massive hike in tax. Marginal Relief perfectly offsets this unfair bump.
Surcharge Slabs & Thresholds
Surcharge applies when your net taxable income crosses specific limits. The rates differ between the Old Tax Regime and the New Tax Regime (Section 115BAC).
- Above тВ╣50 Lakhs: 10% Surcharge
- Above тВ╣1 Crore: 15% Surcharge
- Above тВ╣2 Crores: 25% Surcharge (New Regime max capped at 25%)
- Above тВ╣5 Crores: 37% Surcharge (Old Regime only)
Real-Life Example: How It Saves You Money
Let's look at the mathematics behind Marginal Relief for a taxpayer opting for the New Tax Regime with an income of тВ╣51,00,000.
Income is тВ╣1,00,000 above the тВ╣50L threshold. Without marginal relief, the 10% surcharge on the entire tax would cost more than the тВ╣1,00,000 extra income! Marginal relief caps the tax increase to the excess income earned.
Tax Planning Tips
Smart ways to manage your tax liability near threshold limits.
Check Your Slabs
If you are very close to a surcharge slab (e.g., тВ╣49.5 Lakhs), any bonus or capital gains might push you into the 10% surcharge bracket.
Deductions in Old Regime
In the Old Regime, using 80C, 80D, and 80CCD(1B) can help bring your Net Taxable Income below the threshold to avoid surcharge completely.
New Regime Exemptions
The New Regime offers fewer deductions, but standard deduction (тВ╣75,000 for salaried) and NPS employer contributions (80CCD(2)) are allowed to reduce net income.
Advance Tax
Calculate your expected Marginal Relief early so you don't overpay Advance Tax obligations.