Education Portal for Students in India

2 percent The rate for education cess amounts to 2 percent of the total taxable amount whereas the secondary and higher education cess is 1 percent of the total taxable amount making the comprehensive rate of education cess to be 3 percent of the amount of tax. In order to calculate this, assume a person earns 8 Lakhs per year.
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What is 4% education cess?

How does it impact Taxpayers? – Although cess is not like normal taxes, for taxpayers, it is as good as any other tax since it increases their tax outflow. While an increase in cess on direct taxes raises the tax outflow, cess on indirect taxes may push up the cost of some products, thereby raising the cost of living. The government’s intent behind introducing education cess has been to provide and finance quality basic education for students who are not able to afford the same. Although the initial objective was to help students complete primary education, the government soon realized the importance of providing access to quality secondary and higher education as well.

• To this effect, the Finance Act 2007 introduced an additional secondary and higher education cess of 1%.
• The education cess rate thus became 2% of the tax payable and secondary and higher education cess totalled 1% of the tax payable.
• Together, the education cess rate of 3% of the tax payable was charged on all kinds of taxes.

In the Budget 2018, the government proposed replacing the 3% education cess with 4% health and education cess from FY 2018-19. To understand how education cess is calculated, consider the following example: Scenario 1 – Mohit’s net taxable income for Assessment Year 2018-2019 amounted to Rs.5,00,000. Based on this input, the data as shown in the Tax Calculator page of the Income Tax Department are as follows: Income Tax after relief u/s 87A is Rs.12,500 Surcharge is 0 Education Cess is Rs.250 Secondary and higher education cess is Rs.125 Total Tax Liability is Rs.12,875

Scenario 2 – Mohit’s net taxable income for Assessment Year 2019-2020 amounts to Rs.7,00,000 Based on this input, the data as shown in the Tax Calculator page of the Income Tax Department are as follows:

Income Tax after relief u/s 87A is Rs.52,500 Surcharge is 0 Health and Education Cess is Rs.2,100 Total Tax Liability is Rs.54,600 Education cess is collected to help finance the government’s efforts in running education programs and schemes for children from rural and below-poverty-line households. The funds collected are earmarked to meet the following expenses:

To start government-aided schools and colleges Provide students with the mid-day meals. To pay salaries to the staff of the government schools and colleges. To fund special schemes that aim to make education more accessible for children. In case the government plans to expand the number of educational facilities, then the money collected from education cess can be used to fund such initiatives.

What is meant by education cess? Education cess is an additional tax levied on the basic tax liability with the intention to support the government initiatives to finance basic education for children. In the Budget 2018, Finance Minister Arun Jaitley proposed introducing a 4% Health and Education Cess to help take care the education and healthcare needs of below poverty line and rural families.

• How is education cess calculated? This 3% cess is made up of 2% education cess and 1% of senior secondary education cess.
• In the Budget 2018, however, Finance Minister Arun Jaitley proposed discontinuing the 3% education cess on personal income tax and corporation tax, and instead putting into place a 4% Health and Education Cess.

What is education cess tax in India? Prior to the Budget 2018, the education cess applicable was 3%. However, in Budget 2018, Finance Minister Arun Jaitley proposed replacing education cess, including secondary and higher education cess with health and education cess, which is set at 4%.

Is there any education cess on TDS? According to the Income Tax Department, surcharge and education cess are applicable for TDS purposes in case of tax deduction from salary payment to residents or non-residents. Why education cess is levied? Education cess is levied to help finance the government’s efforts in running education programs and schemes for children from rural and below-poverty-line households.

The money collected is earmarked to meet the following expenses:

To start government-aided schools and colleges To pay salaries to the staff of the government schools and colleges To fund special schemes which aim to make education more accessible Provide students with the mid-day meals

What is the full form of cess? The term ‘Cess’ is a shortened form of ‘assess’. What is meant by cess tax? A cess is a government-imposed tax on tax that is levied to raise funds for specific purposes. Generally, cess is expected to be levied when there is a need to meet specific expenditure for public welfare.

Once the government has collected enough funds for that purpose, the respective cess gets discontinued. What is difference between cess and tax? When compared with cess, tax is a broader term. Cess is an amount that is charged as percentage on the tax amount payable. Cess is different from other taxes collected by the government, like income tax, excise duty, goods and services tax, etc.

The money collected from normal tax flows into the Consolidated Fund of India which can be allocated by the government for any purpose they deem fit. However, cess is a different form of tax and while it may initially get credited to the Consolidated Fund of India, but it has to ultimately be used for the purpose for which it has been collected.
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How is 4 cess calculated?

How Are Cess And Surcharge Calculated For Incomes Above Rs 50 lakh? For FY2023, the tax rates have been left unchanged. While the taxes have not been increased, which is a relief, those in the higher tax brackets and with high incomes continue to pay surcharge, which increases their total tax outgo.

A nationwide survey by Fight Inequality Alliance India (FIA India) had found that more than 80 per cent of those who participated in the study (3,231 Indians) supported tax on the rich and corporations who earned record profits during the pandemic. But how much are the ‘rich’ taxed in India really? Here are a few things to know about cess and surcharge: 1.

In India, on top of the income tax rates, taxpayers also have to pay surcharge and cess, which increases the total tax rate substantially.2. Health and education cess is levied at the rate of 4 per cent on the amount of income-tax plus surcharge.3. The rate of surcharges is 10 per cent, 15 per cent, 25 per cent and 37 per cent based on the taxpayers’ total income.4.

Cess is calculated on total tax and surcharge amount; surcharge is calculated not on the income but only on the total tax amount.5. Cess is collected from every taxpayer to meet a certain purpose, and the surcharge is an additional tax collected from the taxpayers who have higher slab income.6. Surcharge applies to the taxpayer whose income is more than Rs 50 lakh.

The enhanced surcharge of 25 per cent and 37 per cent is not levied, from income chargeable to tax under sections 111A (short term capital gains) and 112A (long term capital gains). Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15 per cent.

How much is the tax on various tax slabs? Here’s a look at what the surcharge and cess amount to in the old tax regime:For income between Rs50 lakh and Rs1 crore, the actual tax rate is 34.32 per cent For income between Rs1 crore and Rs2 crore, the actual tax rate is 35.88 per cent For income between Rs2 crore and Rs5 crore, the actual tax rate is 39 per cent For income above Rs5 crore, the actual tax rate is 42.74 per cent *Rates for individuals under 60 years in old tax regimeSource: Deloitte India

: How Are Cess And Surcharge Calculated For Incomes Above Rs 50 lakh?
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What is education cess on income tax in India?

Education Cess Rate The rate at which education cess is calculated is actually a combination of the two types of cess applied on the taxable income. For the education cess the rate is 2% of the tax payable and for the Secondary and Higher Education Cess the rate is 1% of the tax payable.
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What percentage is education cess calculated on tax amount?

Education Cess Calculation – In order to calculate education cess, let’s assume that a person who earns Rs 8 lakhs annually invests around Rs 30,000 in purchasing a life insurance policy and later contributes around Rs 40,000 into the PPF account. This person also contributes money towards opening a Sukanya Samriddhi account by investing Rs 20,000 and Rs 30,000 for purchasing a pension policy/scheme.

Hence, he invests a total amount of Rs 1 lakh on an annual basis that brings the total amount taxable to Rs 7 lakhs. On the basis of the investments that he has made, the taxation amount that he’ll be paying is Rs 65,000. Hence, the amount of educational cess that he will be paying on the tax would be: Primary Education Cess: Rs 1,300 levied at the rate of two percent of the amount of tax that needs to be paid (i.e.

Rs 65,000).

Secondary and Higher Education Cess: Rs 650 at the rate of one percent of the amount of tax that needs to be paid.Thus, the education cess that needs to be paid in total shall be Rs 1,950 and the amount of income tax that would be due for the person would be Rs 66,950.But, it must be noted that the education cess needs to be paid only the tax amount that is due and if the income comes under non-taxable slab of the IT taxation slab, then you don’t need to pay the cess amount.

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How is education cess calculated?

The rate for education cess amounts to 2 percent of the total taxable amount whereas the secondary and higher education cess is 1 percent of the total taxable amount making the comprehensive rate of education cess to be 3 percent of the amount of tax.
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What is cess rate?

In case GST cess is applicable on goods imported into India, then cess must be levied and collected along with the IGST and customs duty. For example, if the assessable value of goods imported into India is Rs.100/-, the GST rate is 18%, and customs duty is 10%.
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What is the tax on 50 lakhs?

50 lakhs, then he would have to pay only Rs.13,12,500, which means earning an extra 1 Lakh gets him to pay extra income tax of Rs.1,64,250.
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When did education cess increase to 4?

What is an Education Cess? – This section was tweaked slightly in 2018’s Union Budget. Following is a look at the pre-2018 scenario and then at the current scenario for better understanding. On analysing tax payments over the last decade, individuals will notice that each year, a small amount is taxed over and above their basic tax output.

This amount mostly comprises a number of types of cesses, one of which is an education cess, Before 2018, this cess had two components: A Primary Education Cess and an additional Secondary and Higher Education Cess, Both these components were used to make India’s burgeoning education sector robust and modern.

Note that any cess, including education cess, is never deducted from an individual’s salary. It is instead deducted from his or her tax payable. Even corporations have to pay this cess each year at rates determined during the, Therefore, education cess on income tax is an accurate description of this extra outflow.

• Also, before 2018, the total education cess was fixed at 3% of an individual’s tax payable.
• This had been the norm for many years.
• In 2018, the Central Government increased this cess to 4% of taxes payable for both individuals and corporate.
• This increased cess was named health and education cess,
• As is obvious, this extra amount collected would be used for the betterment of both the health and the educational infrastructure of far-flung villages and smaller towns where proper schools were missing.

A health and education cess serve a lot more fields than its predecessor. Surveys have found that the top reason for school drop-outs was a lack of high-quality mid-day meals. It is expected that this 4% cess, introduced throughout India, will have enough firepower to address drop-outs and contribute to improving India’s literacy rate from the present 77.7%.
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What is cess tax with example?

What is Cess? – In simple terms, a cess is a tax on tax. The Indian Government levies it on the tax liability, including surcharge, and is used for a specific purpose. For example, the Indian Government collects a cess on education and utilises it specifically for that purpose alone, that is, education.
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Is education cess tax deductible?

Ray+Keshavan Design Associates Private Limited Vs DCIT (ITAT Bangalore) – Kolkata Bench of the Tribunal in the case of Kanoria Chemicals & Industries Ltd Vs. Addl. CIT (ITA No.2184/Kol/2018 dated 26.10.2021) had held that the education cess is an additional surcharge levied on income tax and hence it partakes the character of income tax.

Accordingly it held that the education cess is not allowable as deduction. The Tribunal also noted the judgment rendered by Hon’ble Bombay High Court in the case of Sesagoa Ltd.117 Taxmann.com 96 and by Hon’ble Rajasthan High Court in the case of Chambal Fertilisers & Chemicals Ltd. Vs. JCIT (ITA No.52/2018 dated 31.7.2018 ), wherein it was held that the education cess is allowable as deduction.

However, the Tribunal observed that the judgment rendered by Hon’ble Supreme Court in the case of CIT Vs.K. Srinivasan (1972) 83 ITR 346 was not brought to the notice of the Hon’ble High Courts. The Tribunal had expressed the view that the decision rendered by Hon’ble Supreme Court in the case of K.

1. Srinivasan (supra) shall prevail on this issue and accordingly held that the education cess is not allowable as deduction.
2. FULL TEXT OF THE ORDER OF ITAT BANGALORE This appeal at the instance of the assessee is directed against CIT(A)’s order dated 16.03.2020.
3. The relevant assessment year is 2010-2011.2.

The grounds raised read as follows:- “1. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in holding that the reimbursement of expenses of Rs.1,20,013/-to appellant’s associated enterprises was a sum chargeable to tax and hence, inadmissible under section 40(a)(i) of the Act as tax has not been deducted.2.

On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in charging write back of excess provisions for salary of Rs.10,00,000/- to tax in as such excess provision has already been charged to tax in assessment year 2009-2010 and hence, resulting into double taxation.3.

On the facts and circumstances of the case and in law, it should be held that the education cess, including secondary and higher education cess (cess) is not inadmissible as per section 40(a)(ii) of the Act and hence, the amount of Rs.9,27,389/- or such other amount as may be determined for the assessment year under reference should be allowed as an admissible deduction in computing the total income.4.

• It is humbly prayed that the reliefs as prayed for hereinabove should be granted.5.
• The appellant craves leave to amend or alter any ground or add a new ground which may be necessary.” We shall adjudicate the above grounds as under:- Disallowance u/s 40(a)(i) of the I.T.Act amounting to Rs.1,20,013 (Ground 1) 3.

The Assessing Officer had disallowed Rs.1,20,013 u/s 40(a)(i) of the I.T. Act. The contentions raised by the assessee and the findings of the A.O. read as follows:- “3. The assessee company has reflected an amount of 1,20,013/- as reimbursement to M/s.Brand Union Worldwide Ltd.

1. London. During-scrutiny, it was stated vide letter dated 18.01.2012 that this amount represents payment of annual charges against invoices raised for the usage of Lotus Note E­mail and Abode Photoshop, being reimbursement of proportionate cost incurred by the Brand Union Worldwide Ltd. – London.
2. It was stated that the said charges are without any mark-up and which in turn are payable by Brand Union Worldwide Ltd.

– London to WPP 2005 Ltd., and are debited under the head printing and stationery. It was further stated that the expenses are re-imbursement in nature and there is no income embedded therein which accrues and arisen in India and consequently the said re-imbursement is not chargeable to tax in India.4.

On consideration of the assessee submission, it is seen that the contention of the assessee that the aforesaid re­imbursement is not chargeable to tax in India is not acceptable. First of all, the assessee’s contention that the amounts paid are only re-imbursement of cost without any mark-up is of no consequence, because the actual payment was made in respect of usage of Lotus Note E-mail and Abode Photoshope, which is in the nature of payment for professional serivces.

The assessee had availed the services in India and hence it definitely comes under the purview of section 195 of the Income tax act. Therefore, an amount of Rs.1,20,013/- is disallowed as per the provisions of section 40(a)(ia) of the income tax act and added back to the return income of the assessee.” 3.1 The CIT(A) confirmed the view taken by the Assessing Officer.

1. The relevant finding of the CIT(A) reads as follows:- “12.
2. I find that the appellant has paid the amount of Rs.1,20,013/- to M/s.Brand Union Worldwide Ltd London.
3. The amount is given by the appellant to M/s.Brand Union Worldwide Ltd London for using Lotus Note E-mail and Adobe Photoshop.
4. The services provided by both the software are like sending emails, making notes and editing the images respectively.

These kinds of services are professional in natures and the assessee has availed these services in India. Hence all the provisions of the IT Act apply and the TDS is to be made on these payments.13. Further the appellant has paid the total charges for all its subsidiaries, but the appellant has not distinguished that the amount paid was irrespective of utilization.

1. There is no evidence that the assessee has specifically utilized that technology.” 3.2 Aggrieved, the assessee raised this issue before the Tribunal.
2. The learned AR submitted that the issue in question is squarely covered in favour of the assessee by the order of the Tribunal in assessee’s own case for assessment year 2011-2012 in ITA No.723/Bang/2020 (order dated 04.04.2022).3.3 The learned Departmental Representative was unable to controvert the above assertion of the learned AR.3.4 We have heard rival submissions and perused the material on record.

The Tribunal in assessee’s own case for assessment year 2011-2012 (supra) on identical facts had held that license fees has been paid for the use of software. It was further held by the Tribunal that the assessee’s holding company procures software from third party and shared the cost with the assessee along with other group companies on a proportionate basis without any mark up.

Therefore, it was concluded by the ITAT that the reimbursement of such expenses by the assessee cannot be held liable for TDS. The relevant finding of the Tribunal in assessee’s own case for assessment year 2011-2012 (supra) reads as follows:- “We have perused submissions advanced by both sides in light of records placed before us.8.

We note that, the payment made by the assessee is towards license fee in respect of the use of software. The said issue is no Page 6 of 9 ITA No.723/Bang/2020 more res integra by the decision of Hon’ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt.Ltd.

1. Vs CIT reported in (2012) 432 ITR 471.
2. It is not the case of revenue that there is a transfer of right to use in respect of these software is owned by Brand Union worldwide Ltd.
3. It is also not disputed by the revenue that, these software are developed by the parent company.
4. Instead we note that Brand Union worldwide Ltd., has been procured these software and has allotted to the group companies, against which, cost have been allocated.

Such an allocation cannot be held to be ‘royalty’ in order to be subjected to TDS provisions.9. As Brand Worldwide Ltd., procures these software from somewhere else and is shared to the assessee along with other group companies against a proportionate cost, without any markup, the reimbursement of such expenses by assessee cannot be held liable for TDS.” 3.5 In view of the Co-ordinate Bench order of the ITAT in assessee’s own case for assessment year 2011-2012 (supra), which is identical to the facts of the instant case, we hold that the assessee is not liable for TDS in respect of payment to M/s.Brand Union Worldwide Limited, London.

• Therefore, the expenditure cannot be disallowed by invoking the provisions of section 40(a)(ia) of the I.T.Act.
• It is ordered accordingly.3.6 In the result, ground 1 is allowed.
• Write back of excess provision towards additional salary of Rs.10,00,000 (Ground 2) 4.
• The assessee had provided an amount of Rs.10 lakh towards additional salary and as it was only a provision, the same was disallowed by the A.O.

and added back to the income of the assessee for assessment year 2009-2010. For the current assessment year the assessee did not make any claim as regards non-taxability of write back of provision of Rs.10 lakh, during the course of assessment proceedings before the A.O.

However, the claim was made as an additional ground before the CIT(A). The CIT(A) rejected the claim of the assessee.4.1 Aggrieved, the assessee has raised this issue before the Tribunal. The learned AR has relied on the remand report submitted by the A.O. (remand report dated 21.10.2019) (refer page 87 to 89 of the paper book submitted by the assessee).4.2 The learned Departmental Representative supported the order of the CIT(A).4.3 We have heard rival submissions and perused the material on record.

The Assessing Officer in the remand report has clearly stated that the claim of the assessee is correct. The relevant portion of the remand report reads as follows:- “In the return of income for the A.Y.2010-11, assessee has write back the provision and offered to tax.

• However, A.Y.2009-10, then AO has disallowed those expenses as provision on salary and added back to income.
• Now, Assessee is claiming that as the provisions on salary were added to Total income in previous year assessment proceedings, the relief may be given for A.Y.2010-11, so as to avoid double taxation.

As per assessment records of A.Y.2009-10 & 2010-11, it was observed that assessee claim is correct.” 4.4 In view of the remand report, it is clear that for the current assessment the assessee had added back the provision on salary and offered the same as income.

1. In the meanwhile the A.O.
2. For assessment year 2008-2009 had disallowed the said expenses as provision and added back the same to income, which tantamount to double taxation of provision of additional salary.
3. Since the A.O.
4. In the remand report has clearly stated that the assessee’s claim is correct, we direct the A.O.

to delete a sum of Rs.10 lakh from the taxable income for the relevant assessment year, since the same had suffered tax in previous assessment year, namely, A.Y.2009-2010. It is ordered accordingly.4.5 In the result, ground 2 is allowed. Allowability of education cess paid as a tax deductible expenditure (Ground 3) 5. The above ground relates to the claim of deduction of education cess including secondary and higher educational cess as deduction while computing the total income.5.1 We have heard rival submissions and perused the material on record.

1. The Kolkata Bench of the Tribunal in the case of Kanoria Chemicals & Industries Ltd Vs. Addl.
2. CIT (ITA No.2184/Kol/2018 dated 26.10.2021) had held that the education cess is an additional surcharge levied on income tax and hence it partakes the character of income tax.
3. Accordingly it held that the education cess is not allowable as deduction.

The Tribunal also noted the judgment rendered by Hon’ble Bombay High Court in the case of Sesagoa Ltd.117 Taxmann.com 96 and by Hon’ble Rajasthan High Court in the case of Chambal Fertilisers & Chemicals Ltd. Vs. JCIT (ITA No.52/2018 dated 31.7.2018), wherein it was held that the education cess is allowable as deduction.

• However, the Tribunal observed that the judgment rendered by Hon’ble Supreme Court in the case of CIT Vs.K.
• Srinivasan (1972) 83 ITR 346 was not brought to the notice of the Hon’ble High Courts.
• The Tribunal had expressed the view that the decision rendered by Hon’ble Supreme Court in the case of K.
• Srinivasan (supra) shall prevail on this issue and accordingly held that the education cess is not allowable as deduction.5.2 Following the above said decision of Kolkata bench of Tribunal in the case of Kanoria Chemicals & Industries Ltd (supra), we hold that payment of education cess including secondary and higher education cess is not allowable as deduction.

Therefore, we reject ground 3 raised by the assessee.6. In the result, the appeal filed by the assessee is partly allowed. Order pronounced on this 11 th day of May, 2022.
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When did education cess start?

Budget 2022| Clarification on ‘health and education cess’ to end conflicting interpretation of tax law: Experts

• Tax experts have said that the clarification by finance minister that health and education cess cannot be treated as a business expenditure would bring the curtains down on a long-pending tax problem that was the result of conflicting interpretation of the law by some high courts.
• Though the clarification takes effect retrospectively and will require some companies to pay additional taxes for the years they claimed the cess as an expenditure, tax professionals have welcomed the move by the finance ministry.
• The cess, levied at 4 percent of the tax payable, is imposed as an additional surcharge on taxpayers for funding select government welfare programmes, specifically primary and secondary education, and health infrastructure.
• In the memorandum explaining the provisions in the Financial Bill, 2022, the government has said that corporates can’t claim a deduction for taxes paid as cess.

Rajiv Chugh, partner, EY welcomed the step, saying it provides much-needed clarity. “In view of the decision of Hon’ble Supreme Court in the case of CIT vs. K Srinivasan (1972) 83 ITR 346, the government has clarified and said that the intention of the legislation was to always show the cess as a tax, and that amount payable is not a tax deduction,” Chugh said.

1. The government has also brought in an amendment to the income-tax Act that restricts companies from doing so and retrospectively seeks to tax all instances of education cess being claimed as deduction.
2. A tax deduction lowers a person’s or an organisation’s tax liability by lowering their taxable income.
3. The amendment will take effect retrospectively from April 1, 2005, and will accordingly apply from the assessment year 2005-06.

The education cess was introduced in the budget for 2004-05 by finance minister P Chidambaram. The cess was initially meant to finance primary education under the Sarva Shiksha Abhiyan. Subsequently, it was raised to provide resources for secondary education and to augment the health infrastructure.

• A controversy had emerged vis-à-vis claim of deduction of education cess as allowable business expenditure.
• The judiciary had provided conflicting views thereon.
• This specific amendment (which has been made with retrospective effect) demystifies the legal position and will curb the litigation surrounding the issue,” said Himanshu Parekh, partner, tax, KPMG in India.

“If a taxpayer pays income tax on profits of the business, the tax can’t be a deductible expenditure while computing the profits. It has now been clarified that a surcharge or cess which is levied on income tax takes the same colour as income tax and, hence, it would not be deductible for tax purposes,” he said.

• The story so far
• Multiple court cases have been fought by companies against the government, with notable plaintiffs being Sesa Goa Ltd and Chambal Fertilizers and Chemicals Ltd.
• The litigants have also secured wins at the Bombay High Court and Rajasthan High Court, both of which upheld their claim that claiming a deduction was legal.
• Both high courts had relied upon a Central Board of Direct Taxes Circular dated May 18, 1967, which held that ‘education cess’ can be claimed as an allowable deduction while computing the income chargeable under the heads ‘profits and gains of business or profession’.
• Subsequently, tax tribunals in various judgments have followed the reasoning in the high court rulings, and have allowed a deduction on account of payment of cess.
• Government rebuttal
• However, the government has said that cess is imposed not only by the central government through the Finance Act for a financial year but also by various state governments.
• “It is pertinent to mention that in the referred circular of CBDT, there is no reference to the ‘Cess’ imposed by the Central Government through Finance Act for a particular year,” the budget memorandum.
• “This CBDT circular needs to be seen from the perspective that ‘Education Cess’ imposed by Finance Act 2004 and subsequent Acts and then designated as ‘Education and Health Cess’ are actually tax in the form of additional surcharge, as stated clearly in each of the relevant Finance Act imposing such Cess,” it said.

Parekh added that there are very few retrospective amendments made by the government in recent years. “Over the past few years, the government has been extremely reluctant to bring in retrospective amendments; however, this amendment will have retrospective effect from April 1, 2005,” he said.

1. Impact on corporates Chugh, who leads EY India’s policy advisory and speciality services, said not all companies have tried to claim a deduction on the education cess.
2. If the issue of claiming education cess deduction was clear, everyone would have claimed it.
3. But in reality, only a few companies claimed it, especially those who could take the technical argument forward that cess is not in the nature of tax and deduction was allowed by various tribunals/high courts,” he said.

Chugh added that the issue has had little impact on corporations, in general. “Presently, education cess is levied at 4 percent (earlier 2 percent or 3 percent, as applicable) and is calculated on the amount of tax and surcharge payable. Therefore, generally, it translates to a relatively low amount,” he said.
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What is education cess?

What is Education Cess? Definition of Education Cess, Education Cess Meaning Suggest a new Definition Proposed definitions will be considered for inclusion in the Economictimes.com Definition: Education cess is an additional levy on the basic tax liability.

Description: Governments resort to imposition of cess for meeting specific expenditure. For instance, both corporate and individual income is at present subject to an education cess of 2%. The government had also imposed another 1% cess in FY08 to finance secondary and higher education. So, the total education cess currently stands at 3%.

Also See: Surcharge

“Some courts are coming up with a verdict which is contrary to the intent of the legislature. We needed to come out with an explanatory amendment.There are times when you have to be retrospective just so that we are being fair. It is not to go with any other intent,” Sitharaman said at a post-budget interaction organised by industry body Ficci. “Some courts are coming up with a verdict which is contrary to the intent of the legislature. We needed to come out with an explanatory amendment.There are times when you have to be retrospective just so that we are being fair. It is not to go with any other intent,” Sitharaman said at a post-budget interaction organised by industry body Ficci. A new financial year may not call for resolutions and lifestyle changes, but your financial life will undergo a quite a few alterations in 2018-19. “All the deductions are given on the basis of savings and therefore saving oriented deductions are available.” The price increase will range from Rs 1 lakh to Rs 9 lakh. People who remain honest by following the law and declaring their true income are penalised with a higher tax every year. This year is no different. People who remain honest by following the law and declaring their true income are penalised with a higher tax every year. This year is no different. The amendments in the GST law could be placed before the parliament in the second part of the Budget session. From the stock market perspective, the most-awaited proposal was the one relating to LTCG. Here’s a lowdown on top Budget triggers that may move market on Friday.

: What is Education Cess? Definition of Education Cess, Education Cess Meaning
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How many cess do I pay in taxes?

Note: – All individuals are liable to pay an additional 4% health and education cess on their total taxable amount. – Individuals having a net taxable income of up to ₹5 lakh can avail of a standard deduction of Rs 12,500, as per section 87 A.
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What is the surcharge above 50 lakhs?

Marginal relief for individuals – Case 1: Where the total income* is more than Rs.50 Lakhs but does not exceed Rs.1 crore, the taxpayers have to pay a surcharge at the rate of 10% on the income tax computed. * Here total income means the net income after all possible deductions or the taxable income.

He will have to pay taxes inclusive of a surcharge of 10% on the tax computed i.e., total tax payable will be Rs.14,76, 750. But, if he would have earned only Rs.50 lakhs, then the tax liability would have been Rs.13,12,500 only(excluding cess). Isn’t it unfair for the individual? For earning an extra Rs.1,00,000, he will end up paying income tax of Rs.1,64,250. The individual’s tax liability should be reduced to avoid any such excess tax payable. The individual will get a marginal relief of the difference amount between the excess tax payable on higher income i.e (Rs.14,76, 750 minus Rs.13,12,500 = Rs.1,64,250 ) and the amount of income that exceeds Rs.50 Lakhs i.e. (Rs.51,00,000 minus Rs.50,00,000 = Rs.1,00,000). The marginal relief will be Rs.64,250 (Rs.1,64,250 minus Rs.1,00,000). Hence, income tax liability on income of Rs.51,00,000 will be Rs.14,12,500.

Case 2: Where the total income is more than Rs.1 crore but less than Rs.2 crore

A surcharge of 15% will be levied on the income tax payable. A marginal relief will be provided to the taxpayer up to the amount of difference between the excess tax payable (including surcharge) on income above Rs.1 crore and the amount of income that exceeds Rs.1 crore. Suppose, if the total income of an individual is Rs.1.01 crore in any FY, he will have to pay tax inclusive of a surcharge of 15% on the tax computed i.e., total tax payable will be Rs.32,68,875. But, if he would have earned only Rs.1 crore, then the tax payable would have been Rs.30,93,750 only. For earning an extra Rs.1,00,000, he will end up paying income tax of Rs.1,75,125. Hence, the individual will get a marginal relief of the difference amount between the excess tax payable on higher income i.e (Rs.1,75,125 ) and the amount of income that exceeds Rs.1 crore i.e. (Rs.1,00,000, in this case). The marginal relief will be Rs.75,125 (Rs.1,75,125 minus Rs.1,00,000).

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Is cess a fee or tax?

What is Cess, Cess News, Cess Definition A cess is a form of tax levied by the government on tax with specific purposes till the time the government gets enough money for that purpose. Different from the usual taxes and duties like excise and personal income tax, a cess is imposed as an additional tax besides the existing tax (tax on tax).

For example, the Swachh Bharat cess is levied by the government for cleanliness activities that it is undertaking across India. A cess, generally paid by everyday public, is added to their basic tax liability paid as part of total tax paid. Difference between tax and cess A cess is different from taxes as it is imposed as an additional tax besides the existing tax (tax on tax).

Another difference lies in the way the revenue recovered from cess is maintained. While revenue from taxes like income tax is kept in the Consolidated Fund of India (CFI) and the government can use it for any purposes it deems fit, the revenue coming from cess is first credited to the Consolidated Fund, and the government may then, after due appropriation from Parliament, utilise it for the specified purpose.

Another major difference between central taxes and cess is that the proceeds of a cess may or may not be shared with the state governments, while that of taxes have to be shared. Various types of cesses levied by the government The government levies different cesses on services it provides to the public. Some of them are as follows: Education cess: Collected by the government to provide the mandatory free standard primary education to all citizens. Health cess: Proposed in 2018 by former finance minister Arun Jaitley to meet the health requirements of below-poverty-line families. Road cess or fuel cess: For maintenance of roads and infrastructure. Clean energy cess: Introduced in 2010, it is a carbon tax on the production and import of coal, lignite and peat, operating on the “polluter pays” principle. Krishi Kalyan cess: It was introduced in 2016 to provide additional support to farmers for agricultural activities.

Swachh Bharat cess: Introduced in 2014 with the objective of delivering a clean India, it is levied at 0.5 per cent on all taxable services to fund Swachh Bharat initiatives. : What is Cess, Cess News, Cess Definition
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What are the new tax rates for 2022?

Income tax on earned income is charged at three rates: the basic rate, the higher rate and the additional rate. For 2022/23 these three rates are 20%, 40% and 45% respectively.
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What is the tax rates for 2022?

The 2023 Income Tax Brackets (Taxes due April 2024) – The 2023 tax year will have the same seven federal tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your filing status and taxable income, including wages, will determine the bracket you’re in.
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Why cess is applied?

The cess will compensate the states for any revenue loss on account of implementation of GST. This cess will not be payable by exporters and those persons who have opted for compensation levy. The input tax credit of this cess can be only used to pay compensation cess and not the other taxes like CGST, SGCT or IGST.
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What is educational cess?

What is Education Cess? Definition of Education Cess, Education Cess Meaning Suggest a new Definition Proposed definitions will be considered for inclusion in the Economictimes.com Definition: Education cess is an additional levy on the basic tax liability.

Description: Governments resort to imposition of cess for meeting specific expenditure. For instance, both corporate and individual income is at present subject to an education cess of 2%. The government had also imposed another 1% cess in FY08 to finance secondary and higher education. So, the total education cess currently stands at 3%.

Also See: Surcharge

“Some courts are coming up with a verdict which is contrary to the intent of the legislature. We needed to come out with an explanatory amendment.There are times when you have to be retrospective just so that we are being fair. It is not to go with any other intent,” Sitharaman said at a post-budget interaction organised by industry body Ficci. “Some courts are coming up with a verdict which is contrary to the intent of the legislature. We needed to come out with an explanatory amendment.There are times when you have to be retrospective just so that we are being fair. It is not to go with any other intent,” Sitharaman said at a post-budget interaction organised by industry body Ficci. A new financial year may not call for resolutions and lifestyle changes, but your financial life will undergo a quite a few alterations in 2018-19. “All the deductions are given on the basis of savings and therefore saving oriented deductions are available.” The price increase will range from Rs 1 lakh to Rs 9 lakh. People who remain honest by following the law and declaring their true income are penalised with a higher tax every year. This year is no different. People who remain honest by following the law and declaring their true income are penalised with a higher tax every year. This year is no different. The amendments in the GST law could be placed before the parliament in the second part of the Budget session. From the stock market perspective, the most-awaited proposal was the one relating to LTCG. Here’s a lowdown on top Budget triggers that may move market on Friday.

: What is Education Cess? Definition of Education Cess, Education Cess Meaning
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What are the four categories of education?

Education in the United States follows a pattern similar to that in many systems. Early childhood education is followed by primary school (called elementary school in the United States), middle school, secondary school (called high school in the United States), and then postsecondary (tertiary) education.

1. Postsecondary education includes non-degree programs that lead to certificates and diplomas plus six degree levels: associate, bachelor, first professional, master, advanced intermediate, and research doctorate. The U.S.
2. System does not offer a second or higher doctorate, but does offer postdoctorate research programs.

Adult and continuing education, plus special education, cut across all educational levels. The following links direct you to information on different aspects of the structure of education in the United States. You may open these documents and link directly to the information sources, or you may save or print the pages and use them later.

Progressing Through the System provides links to research and statistics concerning the flow of students through the U.S. education system as well as education indicators and international comparisons. Evaluation and Assessment provides information on common U.S. grading and credit systems as well as evaluation and standardized tests.

Curriculum and Content Standards provides information on school and tertiary curriculum standards and related reform efforts.U.S. Primary and Secondary Qualifications provides information on the U.S. high school diploma, other secondary qualifications, and high school equivalency for adults.

1. Associate Degrees provides information on the associate degree, credit transfer to bachelor’s level studies, and common associate degree titles.
2. Bachelor’s Degrees provides information on the bachelor’s degree, post-bachelor’s certificate programs and common bachelor’s degree titles.
3. First-Professional Degrees provides information on first degrees in certain professional fields that require completion of prior undergraduate education for admission.

Master’s Degrees provides information on the master’s degree, both non-thesis and research, and common master’s degree titles. Intermediate Graduate Qualifications provides information on certificates, diplomas, and degrees in the U.S. higher education system that represent a level of education between the master’s degree and the research doctorate.

Research Doctorate Degrees provides information on the U.S. research doctorate degree and degree titles considered equivalent to the Doctor of Philosophy (PhD) degree. Postdoctoral Programs and Academic Tenure provides information on research and professional academic programs that follow the award of the research doctorate.

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