# Surcharge for Individual / HUF / AOP / BOI / Artificial Juridical Person

Surcharge is an additional levy on the income-tax once total income crosses specified thresholds. A crucial nuance: the surcharge rate on dividend and on capital gains u/s 111A, 112 and 112A is capped at 15%, even if other income pushes the assessee into a higher surcharge band.

## Surcharge Rate Table

### A. Where Total Income INCLUDES dividend & CG (111A/112/112A)

Total income exceeds	But ≤	DTR	OTR
₹50 lakh	₹1 crore	10%	10%
₹1 crore	₹2 crore	15%	15%

### B. Where Total Income EXCLUDES dividend & CG (111A/112/112A)

Total income exceeds	But ≤	DTR	OTR
₹2 crore	₹5 crore	25%	25%
₹5 crore	—	25% (only)	37%

### C. Special case

If total income (including dividend & CG u/s 111A/112/112A) exceeds ₹2 crore but does not fall in the above categories → surcharge = 15%.

## The 15% Cap Rule

Surcharge on tax attributable to dividend and CG u/s 111A/112/112A shall not exceed 15% (i.e., 10% or 15% as applicable).
All other incomes (including lottery & casual income u/s 115BB) bear surcharge at 10 / 15 / 25 / 37% as applicable.
Under DTR (115BAC) the maximum surcharge is capped at 25% — the 37% rate never applies.

Worked example

### Example 1

Split-rate surcharge (OTR): An individual has total income of ₹6 crore = ₹4.5 crore normal income + ₹1.5 crore LTCG u/s 112A. Surcharge on tax on the ₹4.5 crore normal income = 37% (income > ₹5 cr, excludes CG). Surcharge on tax on the LTCG portion = capped at 15%. The two components are computed separately and added.

### Example 2

DTR cap: Same facts but under DTR — surcharge on the normal income portion is capped at 25% (the 37% band does not exist under 115BAC), and surcharge on the LTCG portion remains at 15%.

⚠️ Common exam mistakes

Applying 37% surcharge under the Default Tax Regime — DTR caps surcharge at 25%.
Charging 25%/37% surcharge on the tax attributable to dividend or CG u/s 111A/112/112A — it is capped at 15%.
Including dividend & 111A/112/112A capital gains when checking the ₹2 cr–₹5 cr / >₹5 cr thresholds — those bands use total income EXCLUDING such items.
Forgetting the special 15% rate that applies when income including dividend/CG exceeds ₹2 cr but doesn't fall into the higher exclusive bands.

Reference:

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Surcharge for Individual / HUF / AOP / BOI / AJP

Worked example

⚠️ Common exam mistakes