No Surcharge on Income Below ₹50 Lakh: ITAT Pune

Nawander Arcade Vs ITO (ITAT Pune)

Mumbai: In a significant ruling for taxpayers, the Income Tax Appellate Tribunal (ITAT) has held that surcharge is not leviable on the income of a private trust if the total income is below ₹50 lakh. The decision came in appeals filed by an assessee against orders from the Addl./JCIT(A), Faridabad, concerning Assessment Years 2023-24 and 2024-25.

The core of the dispute centered on the Centralized Processing Centre’s (CPC) action of levying a 37% surcharge on the tax payable by the assessee, a private trust, whose declared income was ₹7,84,000 for AY 2023-24 and ₹8,20,920 for AY 2024-25. The assessee contended that surcharge, according to the provisions of the Income-tax Act, 1961, and the relevant Finance Act, is applicable based on specific income slabs, and for the assessment years in question, it is leviable only when the total income exceeds ₹50 lakh.

The assessee relied on the decision of the Hon’ble Special Bench in the case of Araadhaya Jain Trust vs. ITO (ITA No. 4272/Mum/2024, order dated 09.04.2025). This precedent established that surcharge is leviable based on the slab rates provided in the First Schedule under the heading “surcharge on income tax” in Paragraph A, Part 1, applicable to the relevant assessment year. The Special Bench had clarified that surcharge is triggered only when the income crosses the specified threshold, which was ₹50 lakh for the periods under consideration.