All About CESS on INCOME TAX

Introduction of CESS

Education Cess (EC) – 2004
Secondary & Higher Edu. Cess (SEC) – 2007
Health & Edu. Cess (HEC) – 2018

Need?

Cess is collected with the aim of addressing the educational and healthcare needs of rural families in India.

Cess collected for a particular purpose cannot be used for or diverted to other purposes. A particular cess continues to be levied till the time the government collects enough funds for the purpose that it was introduced for.

Present SCENARIO

Taxpayers are liable to pay 4% HEC on the Direct Income Tax (including surcharge), irrespective of the income tax slab. It garners thousands of Crores which is used to help provide health insurance cover under Ayushmaan Bharat. It helps providing annual health cover of Lakhs of poor & vulnerable families of sections of the society as per the SECC 2011 data, which covers more than 40% of the Indian population.

With the outbreak of COVID-19, health insurance cover is of priority to improve access to medical treatment for all.