Surcharge is levied on the amount of income tax, if total income of an assessee exceeds specified limits. In India, an assessee needs to pay a surcharge on income tax if his income falls under the upper tax slab of 30% as per the Income Tax Act.
Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.
A resident individual taxpayer(whose total income is less than Rs 5 lakh after claiming deductions) can avail rebate under section 87A. Section 87A offers some relief to the taxpayers who fall under the tax slab of 10%.
The amount of rebate is 100% of income tax or Rs. 12,500, whichever is less. This rebate is deductible from income tax before calculating education cess.