Why do you have to pay health and education cess?

Acess is a form of tax levied or collected by the government for the development or welfare of a particular service or sector. It is charged over and above direct and indirect taxes.

At present, the government charges a 4% health and education cess on the direct income tax liability of individuals. This cess was introduced in Union Budget 2018 by then finance minister Arun Jaitley, who replaced the earlier secondary and higher education cess of 3%.

As the name suggests, health and education cess is collected with the aim of addressing the educational and healthcare needs of rural families in India.

Cess collected for a particular purpose cannot be used for or diverted to other purposes. A particular cess continues to be levied till the time the government collects enough funds for the purpose that it was introduced for.