Why cess is charged on income tax?
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Why cess is charged on income tax?
Cess is a form of tax and an additional levy by the Central Government to raise funds for specific purpose. Cess is resorted to only when there is a need to meet specific expenditure for the Public welfare and to be discontinued once the objective is met.
Why is cess charged?
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).
What is 4 cess in income tax?
Health and Education Cess : Health and Education Cess is levied at the rate of 4\% on the amount of income-tax plus surcharge. Note: A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15\%.
How cess is calculated on income tax?
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. Hence, the total income tax amount would come to Rs. 66,950.
What is difference between cess and tax?
Cess meaning: Cess is a form of tax charged/levied over and above the base tax liability of a taxpayer. Cess meaning, difference from tax: Cess is different from taxes such as income tax, GST, and excise duty etc as it is charged over and above the existing taxes.
What is difference between cess and surcharge?
-Cess is calculated on total tax and surcharge amount; surcharge is calculated on total tax amount only. -In a nutshell, while both are taxes, 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.
What is the difference between tax and cess?
Cess meaning, difference from tax: Cess is different from taxes such as income tax, GST, and excise duty etc as it is charged over and above the existing taxes. Cess meaning: Cess is a form of tax charged/levied over and above the base tax liability of a taxpayer.
What is cess in income tax India?
Cess in India. A cess is a form of tax that is levied by the government of a country to raise funds for a particular purpose. For instance, the funds collected from the Education Cess would be used for the funding of the primary, higher and secondary education.
Who pays cess?
The cess is imposed on all taxpayers in India who pay taxes. If any tax is generated on income, regardless of the amount, he must pay a tax on that tax as well. Cess is paid to the Consolidated Fund of India, but it can only be used for particular purposes.