As per recent order of CBDT- No Marginal Relief in case of Health and Education Cess

1. The Central Board of Direct Taxes (CBDT) has clarified that no marginal relief shall be available in Health Cess (HC) and Education Cess (EC).
2. EC is an additional levy on the basic tax liability. The government uses the collected money from cess to improve the structure of education in the country. Also, the government does such charitable works like giving Mid Day Meal, Free books, uniforms, cycle, etc. to the students with the money collected as cess.
3. The rate of EC is 3% ( 2% for Primary education and 1%  for Secondary & Higher education). It is levied on Personal income tax and Corporation tax.
4. An existing 3%  will be replaced by a 4% ‘HEALTH AND EDUCATION CESS ‘. It means this 4% rate will be applicable from the financial year 2018-19 / AY 2019-20. This is to take care of the education and health needs of poor and rural families.
5. In the Budget 2018, Finance Minister Arun Jaitley proposed various programs to meet the education and health needs of Below Poverty Line (BPL) and rural families such as improving the quality of education, teachers, digital initiatives, quality education to tribal children
6. Health and Education Cess” shall be levied at the rate of four per cent of income tax including surcharge wherever applicable.

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