Example of Surcharge Calculation

For an employee, the value of Total Income wage type (/434) = INR 1008000.

In this case,

·        Tax on total Income wage type (/436) = INR 2,52,400

·        Tax payable wage type (/446) = INR 2,52,400

Since the value of Total Income wage type (/434) is greater than INR 10,00,000, a surcharge of 10% will be calculated on Tax payable wage type (/446).

Let a = Surcharge = 10% of INR 2,52,400 = INR 25,240

Now,

Let A = Income tax on INR 10,00,000 = INR 2,50,000

Let B = Value of Total Income wage type (/434) - INR 10,00,000

         = INR 10,08,000 - INR 10,00,000

         = INR 8,000

Sum of the values of A and B = INR 2,50,000 + INR 8,000 = INR 2,58,000.

The value of Tax payable and surcharge wage type (/450) cannot exceed INR 2,58,000.

Since the value of Tax payable wage type (/446) = INR 2,52,400,

Surcharge cannot exceed: INR 2,58,000 - INR 2,52,400 = INR 5,600

Let b = INR 5,600

Since the value of b is lower than the value of a, the value of Surcharge payable wage type (/448) = INR 5,600.