Surcharge is an additional tax or charge levied as a percentage of existing tax amount, but without any specific purpose.
It is levied if the size of tax base exceeds a certain threshold limit. The revenue earned via surcharge is solely retained by the centre and not shared with states.
Example- individuals with net income exceeding Rs.50 Lakhs but not exceeding Rs. 1 Crore, a surcharge of 10% is levied on tax liability.
