Computation of surcharge on the amount of income-tax where assessee is entitled to rebate under Chapter VIII

1. Central Board of Direct Taxes have received queries from the assessees, who are to file their returns of income for the assessment year 1991-92, regarding computation of surcharge on income-tax where the total income of a person exceeds Rs. 75,000.  The queries are as to whether surcharge is to be computed on the amount of income-tax before or after allowing tax rebate under Chapter VIII of the Income-tax Act, i.e., tax rebate on life insurance premia, contributions to provident fund and investment in certain new shares or units, etc.

2. This is to clarify that surcharge is to be computed on the amount of income-tax as reduced by the tax rebate calculated under Chapter VIII of the Act.

Circular : No. 606, dated 20-6-1991.

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