Surcharge is a tax on tax. Hence surcharge is calculated on the tax payable and not on the income earned. For example, if you have an income of Rs 1000 with 30% tax of Rs. 300, if the income is subject to surcharge then 10% surcharge would be levied on tax of Rs. 300 i.e Rs 30. Surcharge is levied at different rates i.e 10% is levied is total income is > 50 lakh, 15% is levied if total income is more than 1 crore, 25% of income if total income is > 2 crore and 37% if total income is more than 5 crore.