Glossary
Marginal Relief
Meaning & Definition
Marginal relief is one of the benefits allowed in the income tax system, in such a way that there is no risk of paying much more tax simply because of a small rise in the taxpayer’s income just over the threshold of tax. In the field of Human Resources and Payroll, marginal relief holds great importance.
Importance of Marginal Relief
- It prevents the sudden burdening of tax on employees.
- Helps in proper salary tax computations.
- Facilitates payroll and tax deduction processes.
- Helps employees to plan properly.
- Increases transparency in TDS.
Applicable Rules & Regulations
Marginal relief is covered under the provisions of the Income Tax Act, 1961, in the context of the surcharge limit in India. This concept of marginal relief comes into play when the taxable income of an individual crosses over the limit of surcharge income by just a margin.
