Education Cess is the amount of money that is levied on the basic tax liability of a person. The amount thus collected by the Government is utilized for the improvement of the overall education standard of the country and also for reducing the illiteracy percentage of the country as a whole.
When was Education Cess Introduced?
The collection of education cess was introduced in India through the Union Budget from the financial year 2004. The education cess payable is now 3% of the tax payable by any individual or any corporate. Earlier, it was 2% of the tax payable, however, from financial year 2008, an additional 1 % levied on the tax amount. The amount of levy collected goes in funding of various Government sponsored schemes and it was subsequently increased keeping in view the needs of the growing population and to impart standards keeping in view the global conditions.
Obviously, there was a resistance from the citizens of the introduction of this levy, and they expressed their doubts on the end use of the amount thus collected, the debate intensified further when the Education Cess law was amended to include expenses related to universal healthcare as one of the legitimate end use.
