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Surcharge is additional tax on top of income tax. For individuals: • Income ₹50L–₹1Cr: 10% surcharge • Income ₹1Cr–₹2Cr: 15% surcharge • Income ₹2Cr–₹5Cr: 25% surcharge • Income above ₹5Cr: 37% surcharge.
HNI wealth · HNI Tax
Surcharge schedule: where the 37% surcharge hits and how to plan around it
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Provisions
IT Act, Sec 2(1A) | Finance Act 2023 surcharge cap on LTCG
Analysis
Effective rate at ₹5Cr+ income (highest bracket): Salary/business income: 30% × 1.37 × 1.04 = 42.74% LTCG on listed equity (capped surcharge): 12.5% × 1.15 × 1.04 = 14.95% Debt/MLD/structured products: 30% × 1.37 × 1.04 = 42.74%. Planning implication: For very HNI investors, the gap between equity LTCG (15%) and debt income (42.74%) is enormous. Every rupee that can be structured as LTCG on equity saves 28 percentage points of tax.
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