There is no respite from cess for Indian taxpayers. In the Union Budget 2018, finance minister Arun Jaitley has proposed to replace the existing 3% education cess on personal income tax and corporation tax with a 4% ‘Health and Education Cess’. This is intended to fund the education and health needs of poor and rural families.
The current 3% cess comprises 2% cess for primary education and 1% for secondary and higher education, which is levied on personal income tax and corporation tax. This was introduced in 2008. Now that has been hiked to 4% with a different nomenclature in Budget 2018. Cess is every finance minister’s favourite route to generate more revenues.
It’s a cesspool out there
|Cess||On which tax||How much||Introduced||Status now|
|Education Cess||Income Tax||2% in 2004, 3% in 2008||2004||Increased from 3% to 4% in 2018|
|10% Surcharge||Income Tax||Income Tax above 10 lakh||N/A||Abolished in 2008|
|10% Surcharge||Income Tax||Income Tax above 50 lakh||2017||Exists still|
|10% Surcharge||Income Tax||Income Tax above 1 crore||2014||Increased to 15% in 2016|
|Swachh Bharat Cess||Service Tax||0.5% of value of service||2015||Abolished by GST|
|Krishi Kalyan Cess||Service Tax||0.5% of value of service||2016||Abolished by GST|