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What is Education Cess?

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Quick 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.

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What is Education Cess?
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Full Answer

Originally, the Education Cess, as its name implies, was collected for the purpose of bettering public education throughout India; this is implemented in order to keep up the demands of a growing population and expanding global economic market. The Indian government felt that the nation's schools were lagging, that students were unable to continue to compete with those of nations with more advanced schools; therefore, India was unable to maintain a leading role in the global economy without taking measures to improve the overall quality of education.

The tax became a point of debate, however, with concerned citizens questioning the legitimacy when the government began assessing it prior to the receipt of formal presidential approval. The debate continued with the concerned citizens questioning just how much of the Education Cess funds were actually being allocated for the improvement of the education. The debate intensified further when the Education Cess law was amended to allow the proceeds to be used for other purposes, such as universal healthcare.

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