We are exploring how to implement surcharge calculation in ERPNext Payroll to align with Indian income tax laws.
In Indian payroll, surcharge is an additional tax levied on individuals or entities whose taxable income exceeds specified thresholds. It applies as a percentage of the calculated income tax and is primarily relevant for high-income earners. Here’s how it generally works:
- 10% Surcharge: Income exceeding ₹50 lakh but less than ₹1 crore.
- 15% Surcharge: Income between ₹1 crore and ₹2 crore.
Cess Application also changes to (income tax + surcharge) in case of surcharge.
We’re curious to hear if others in the community have tackled this or have suggestions on the best way to approach it.
Looking forward to your insights!