Surcharge is charged on the individuals who have a taxable of more than Rs.50 lakhs. This existed in two slabs prior to this budget. Till last year, the surcharge was charged at 10% for income above Rs.50 lakh and up to Rs.1 crore. For income above Rs.1 crore, the surcharge was to be charged at 15%. In the current budget, there are two additional slabs that have been introduced. People earning above Rs.2 crore and up to Rs.5 crore will now pay a surcharge of 25% while those earning above Rs.5 crore per year will now pay a surcharge of 37%. The table will help you understand the new surcharge calculation clearly. The Cess will continue to apply on all income slabs at 4%. Check the table below.

Income Slab

Tax Rate

Surcharge

Cess

Effective Tax Rate

Rs.50 l to Rs.1 cr

30%

10%

4%

34.32%

Rs.1 cr to Rs.2 cr

30%

15%

4%

35.88%

Rs.2 cr to Rs.5 cr

30%

25%

4%

39.00%

Above Rs.5 cr

30%

37%

4%

42.74%

As you can see from the above table, the tax liability of persons earning above Rs.2 crore and above Rs.5 crore has gone up substantially after this budget.