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Education Cess , Surcharge Interview Questions & Answers - Learning Mode

Education Cess , Surcharge Interview Questions & Answers - Learning Mode

Education cess is deducted and used for Education of poor people in INDIA. All taxes in India are subject to an education cess, which is 3% of the total tax payable. The education cess is mainly applicable on Income tax, excise duty and service tax. Surcharge is an extra tax or fees that added to your existing tax calculation. This tax is applied on tax amount.

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Education Cess , Surcharge Interview Questions & Answers - Learning Mode
Try Education Cess , Surcharge Interview Questions & Answers - Exam Mode
Question: What is Education Cess?

Answer: The Education Cess is a tax in India ordered to help cover the costs of government-sponsored programs. The CESS was levied in 2004. Although the rate is assessed at 2 percent of income, it is collected independently of other taxes and applies to all Indian citizens and corporations as well as anyone living in India. Source:
Question: Since when Education Cess became ineffective and is not applicable?

Answer: After the finance minister Arun Jaitely increased teh Service Tax from 12% to 14%, effective from June 1st, 2015, Education Cess has become ineffective and is not applicable now. Source:
Question: How to Calculate Education Cess?

Answer: Let us take an example of Aneesh. He has an annual income of Rs. 8 lakhs out of which he invests Rs. 30,000 in life insurance and contributes Rs. 40,000 towards a PPF account. He also makes a contribution to the Sukanya Samriddhi Account to the tune of Rs. 20,000 and invests Rs. 30,000 in a pension scheme. This means that his total investments amount to Rs. 1 lakh in a year which brings his taxable income down to Rs. 7 lakhs.

Based on his investments, the tax that he will have to pay is R Source:
Question: How Education Cess works?

Answer: Example 1: Individual

Let's say an individual has income of ₹800,000, and his tax liability is ₹85,000. In addition to this tax of ₹85,000, he will to pay a 3% education cess on the amount. Education cess works out to ₹2,781 (education cess of ₹1,700 and secondary and higher education cess of ₹850). So the total tax liability of the individual will go up to ₹87,781.
Example 2: Domestic Company

A domestic company has an income of S Source:
Question: How is Education Cess Calculated?

Answer: 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. Together they form the education cess rate of 3% of the tax payable. Source:
Question: How is Education Cess Used?

Answer: As the name suggests, this is a cess that is collected in order to enable the government to run education programs and schemes that can help improve the quality and access to education in the country. The money that has been collected by the government is earmarked for the following expenses:-

The cess is used to provide students with the mid-day meals.
It is also used for setting up government aided schools and colleges.
The staff of the government schools and colleges Source:
Question: Education Cess is levied on which Taxes?

Answer: The education cess is levied on income tax, service tax, excise duty, wealth tax and corporate tax. In short, education cess is livable to all the assessee. Source:
Question: How much Education Cess has been collected till now?

Answer: When cess was introduced, approximate Rs. 10393 crore was collected in first year. As per figure in year 2007, Rs. 23509 crore has collected in four years from 2004 to 2007 as primary education cess.

Amount collected as secondary and higher secondary education cess during the year 2008 to 2010 is as follow.

(In crores)
Year Cess on direct tax Cess on indirect tax
2007-08 2910.96 2875.23
2008-09 3124.67 2660.30
2009-10 3783.44 2506.54

This data is collecte Source:
Question: What is Education Cess?

Answer: The progress of country directly relates with progress of its citizens. Education is the base of progress of each person. To progress correctly, the person should get sufficient education. To make a person more educated, there must be sufficient schools and sufficient facilities in those schools. All the facilities need fund and to raise fund for it, government has started to levy education CESS in 2004. As per name, education cess is to collect fund for provision of education facilities in the Source:


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