# Marginal Relief for Individual / HUF / AOP / BOI / AJP
Marginal relief prevents a situation where a small increase in income above a surcharge threshold causes the tax + surcharge to rise by more than the increase in income. The relief caps the extra burden at the amount of income exceeding the threshold.
## General 3-Step Method (applied at each threshold)
1. Compute tax on total income + surcharge at the applicable rate.
2. Compute tax (with surcharge) on the threshold amount + (Total Income − Threshold).
3. If Step 1 > Step 2, Relief = Step 1 − Step 2. (If negative, ignore.)
## Threshold-wise Application
| Total income range | Step 1 surcharge | Step 2 base (threshold + lower surcharge) |
|---|---|---|
| > ₹50 lakh ≤ ₹1 cr | TI + 10% | Tax on ₹50 lakh + (TI − ₹50 lakh) |
| > ₹1 cr ≤ ₹2 cr | TI + 15% | (Tax on ₹1 cr + 10%) + (TI − ₹1 cr) |
| > ₹2 cr ≤ ₹5 cr | TI + 25% | (Tax on ₹2 cr + 15%) + (TI − ₹2 cr) |
| > ₹5 cr | TI + 37% | (Tax on ₹5 cr + 25%) + (TI − ₹5 cr) |
Note: The > ₹5 crore (37%) category does NOT apply under DTR, since maximum surcharge u/s 115BAC cannot exceed 25%.
## Important: Interaction with the 15% Cap
If total income includes dividend or capital gains, the surcharge on that component cannot exceed 15%. This must be respected when computing marginal relief in cases where total income exceeds ₹2 crore.