Many people in India have doubt on What is Education Cess and Why it is Charged. So here on our website, we have given below all information about Education Cess. After reading this article, you can get an idea on Education Cess. Now-a-days the parents are interested in joining their children in Private Schools other than Public Schools. The reason is that in Public Schools they are not providing quality education. And we all know that meal poisoning in the mid-day meal provided in public schools. So all the parents who are having good financial support are shifting their children from public schools to private schools. If the Education Cess charged by the Government is utilized correctly, then this problem may not arise. So, first of all, learn What Education Cess is, and Rate of Education Cess charged on an individual.
What is Education Cess?
Education Cess is divided into 2 parts the first one is Primary Education Cess and the Second is Secondary and Higher Education Cess.
Primary Education Cess:
This Primary Education Cess was introduced and charged to provide quality education to the Students who are studying in Public Schools.
Secondary and Higher Education Cess:
This Cess was levied by the Government for improving the quality of Education in Colleges.
This Education Cess is levied or charged by Government of India for the improving the standards of Education in Public Schools. This Education Cess is levied as a part of Income Tax by the Income Tax Department. Education Cess or Primary Education Cess was implemented in the year 2004. In order to provide the financial support and quality education to Colleges and Educational Institutions, the government introduced higher education cess in 2007. Education Cess is collected to provide Children with the mid-day meals, To increase salaries to the staff of the School so that they can contribute effective subject to the children. This cess is also be used to give funds to the schemes like the Rashtriya Madhyamik Shiksha Abhiyan, which aims at making secondary education more accessible.
Rate of Education Cess:
At present the Education Cess charged by the Government is 3%. That is Primary Education Cess is 2%, and Secondary and Higher Education Cess is 1%. This Education Cess is the tax that is charged on the tax you need to pay but not on the net income which is taxable. For example, if your net income is Rs. 10 lakhs, the income tax charged for that net income is Rs. 1,25,000 then the education cess is levied at the rate of 3% on the income tax rate (i.e., Rs. 1,25,000) but not on the Net Income Value (Rs. 10 Lakhs).
Calculation of Education Cess:
Example: Mr. Srikanth is earning Rs. 10,00,000/- per annum. Then what is the Income Tax applicable to him including with Education Cess?
Sol: For an Individual for the income of Rs. 10,00,000/- the income taxable = Rs. 1,25000/-
Education Cess = 3% of the taxable income [i.e., 1, 25000 x (3/100)]
Total Income taxable = Rs. 128750/-
Education Cess Rate for AY 2016-17 i.e. for FY 2015-16
The Rates of Education Cess are given as per the Income Tax Slabs.
Tax rates applicable to a Resident Individual below the age of 60 years (i.e. born on or after 1/4/1956)
| Net income range | Income tax rates | Surcharge | Education Cess | Secondary and higher Education Cess |
| Up to Rs. 2,50,000/- | Nil | Nil | Nil | Nil |
| Rs. 2,50,000/- to Rs. 5,00,000/- | 10% of (total income minus Rs. 2,50,000/-) | Nil | 2% of income tax | 1% of income tax |
| Rs. 5,00,000/- to Rs. 10,00,000/- | Rs. 25,000/- + 20% of (total income minus Rs. 5,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Above Rs. 10,00,000/- | Rs. 1,25,000/- + 30% of (total income minus Rs. 10,00,000/-) | Nil | 2% of income tax | 1% of income tax |
Tax rates applicable to a resident individual of 60 years or above at any time during the previous year but below the age of 80 years i.e. born during 1/4/1936 to 31/3/1956
| Net income range | Income tax rates | Surcharge | Education Cess | Secondary and higher Education Cess |
| Up to Rs. 3,00,000/- | Nil | Nil | Nil | Nil |
| Rs. 3,00,000/- to Rs. 5,00,000/- | 10% of (total income minus Rs. 3,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Rs. 5,00,000/- to Rs. 10,00,000/- | Rs. 20,000/- + 20% of (total income minus Rs. 5,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Rs. 10,00,000/- to Rs. 1,00,00,000/- | Rs. 1,20,000/- + 30% of (total income minus Rs. 10,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Above Rs. 1,00,00,000/- | Rs. 28,20,000/- + 30% of (total income minus Rs. 1,00,00,000/-) | 12% of income tax | 2% of income tax and surcharge | 1% of income tax and surcharge |
Tax rates applicable to a Resident Super Senior Citizen
| Net income range | Income tax rates | Surcharge | Education Cess | Secondary and higher Education Cess |
| Up to Rs. 5,00,000/- | Nil | Nil | Nil | Nil |
| Rs. 5,00,000/- to Rs. 10,00,000/- | 20% of (total income minus Rs. 5,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Rs. 10,00,000/- to Rs. 1,00,00,000/- | Rs. 1,00,000/- + 30% of (total income minus Rs. 10,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Above Rs. 1,00,00,000/- | Rs. 28,00,000/- + 30% of (total income minus Rs. 1,00,00,000/-) | 12% of income tax | 2% of income tax and surcharge | 1% of income tax and surcharge |
Tax rates applicable to a Non-resident individual irrespective of age
| Net income range | Income tax rates | Surcharge | Education Cess | Secondary and higher Education Cess |
| Up to Rs. 2,50,000/- | Nil | Nil | Nil | Nil |
| Rs. 2,50,000/- to Rs. 5,00,000/- | 10% of (total income minus Rs. 2,50,000/-) | Nil | 2% of income tax | 1% of income tax |
| Rs. 5,00,000/- to Rs. 10,00,000/- | Rs. 25,000/- + 20% of (total income minus Rs. 5,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Rs. 10,00,000/- to Rs. 1,00,00,000/- | Rs. 1,25,000/- + 30% of (total income minus Rs. 10,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Above Rs. 1,00,00,000/- | Rs. 28,25,000/- + 30% of (total income minus Rs. 1,00,00,000/-) | 12% of income tax | 2% of income tax and surcharge | 1% of income tax and surcharge |
Income Tax Slab Rates Applicable to a Resident/Non-resident Hindu Undivided Family (HUF)
| Net income range | Rate of Income tax | Surcharge | Education Cess | Secondary and higher Education Cess |
| Up to Rs. 2,50,000/- | Nil | Nil | Nil | Nil |
| Rs. 2,50,000/- to Rs. 5,00,000/- | 10% of (total income minus Rs. 2,50,000/-) | Nil | 2% of income tax | 1% of income tax |
| Rs. 5,00,000/- to Rs. 10,00,000/- | Rs. 25,000/- + 20% of (total income minus Rs. 5,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Rs. 10,00,000/- to Rs. 1,00,00,000/- | Rs. 1,25,000/- + 30% of (total income minus Rs. 10,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Above Rs. 1,00,00,000/- | Rs. 28,25,000/- + 30% of (total income minus Rs. 1,00,00,000/-) | 12% of income tax | 2% of income tax and surcharge | 1% of income tax & surcharge |
Income Tax Slab Applicable to every AOP/BOI/Artificial juridical person
| Net income range | Income tax rate | Surcharge | Education Cess | Secondary and higher Education Cess |
| Up to Rs. 2,50,000/- | Nil | Nil | Nil | Nil |
| Rs. 2,50,000/- to Rs. 5,00,000/- | 10% of (total income minus Rs. 2,50,000/-) | Nil | 2% of income tax | 1% of income tax |
| Rs. 5,00,000/- to Rs. 10,00,000/- | Rs. 25,000/- + 20% of (total income minus Rs. 5,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Rs. 10,00,000/- to Rs. 1,00,00,000/- | Rs. 1,25,000/- + 30% of (total income minus Rs. 10,00,000/-) | Nil | 2% of income tax | 1% of income tax |
| Above Rs. 1,00,00,000/- | Rs. 28,25,000/- + 30% of (total income minus Rs. 1,00,00,000/-) | 12% of income tax | 2% of income tax and surcharge | 1% of income tax and surcharge |
Income Tax Slab Rates Applicable to a Firm
- A firm is taxed at a flat rate of 30%.
- Education Cess: 2% of income tax.
- Secondary and Higher Education Cess: 1% of income tax.
| Net income range | Surcharge | Education Cess | Secondary and Higher Education Cess |
| Above Rs. 1,00,00,000/- | 12% of income tax | 2% of income tax and surcharge | 1% of income tax and surcharge |
Income Tax Slabs Applicable to a Domestic Company
- A domestic company is taxed at a flat rate of 30%.
- Education Cess: 2% of income tax.
- Secondary and Higher Education Cess: 1% of income tax.
| Net income range | Surcharge | Education Cess | Secondary and Higher Education Cess |
| Above Rs. 1,00,00,000/- but less than Rs. 10 crore | 7% of income tax | 2% of income tax and surcharge | 1% of income tax and surcharge |
| Above Rs. 10,00,00,000/- | 12% of income tax | 2% of income tax and surcharge | 1% of income tax and surcharge |
Income Tax Slab Applicable to a Foreign Company
- A foreign company is taxed at a flat rate of 40%.
- Education Cess: 2% of income tax.
- Secondary and Higher Education Cess: 1% of income tax.
| Net income range | Surcharge | Education Cess | Secondary and Higher Education Cess |
| Above Rs. 1,00,00,000/- but less than Rs. 10 crore | 2% of income tax | 2% of income tax and surcharge | 1% of income tax and surcharge |
| Above Rs. 10,00,00,000/- | 5% of income tax | 2% of income tax and surcharge | 1% of income tax and surcharge |
Income Tax Slab Applicable to a Co-operative Societies
| Net income range | Income Tax Rates | Surcharge | Education Cess | Secondary and Higher Education Cess |
| Up to Rs. 10,000/- | 10% | Nil | Nil | Nil |
| Rs. 10,000/- to Rs. 20,000/- | 20% | Nil | 2% of income tax | 1% of income tax |
| Rs. 20,000/- to Rs. 1 Crore | 30% | Nil | 2% of income tax | 1% of income tax |
| Above Rs. 1,00,00,000/- | 30% | 12% of income tax | 2% of income tax and surcharge | 1% of income tax and surcharge |
Income Tax Rates Applicable to a Local Authorities
- A foreign company is taxed at a flat rate of 30%.
- Education Cess: 2% of income tax.
- Secondary and Higher Education Cess: 1% of income tax.
| Net income range | Surcharge | Education Cess | Secondary and Higher Education Cess |
| Above Rs. 1,00,00,000/- | 12% of income tax | 2% of income tax and surcharge | 1% of income tax and surcharge |
Hence, these are the Rates of Education Cess that are charged or levied from a taxpayer in India.
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