Budget 2018: Finance Minister proposes 4% education cess

Apart from some crucial announcements in the education budget, Union Finance Minister Arun Jaitley has proposed to replace existing 3 per cent education cess on personal income tax and corporation tax with 4% education cess- ‘Health and Education Cess’ to take care of the education and health needs of poor and rural families.

At present, a 3 per cent cess, consisting of 2 per cent cess for primary education and 1 per cent cess for secondary

and higher education is levied on personal income tax and corporation tax.


“In order to take care of the needs of education and health of BPL and rural families… I propose to increase the

cess by one per cent. The existing three per cent education cess will be replaced by a four per cent ‘Health and Education Cess’ to be levied on the tax payable. This will enable us to collect an estimated additional amount of Rs 11,000 crore,” Jaitley said while presenting the Budget 2018-19 in Parliament today.

Jaitley in his Budget speech also said that it has been decided that by 2022, every block with more than 50% Schedule Tribe (ST) population and at least 20,000 tribal persons will have an Ekalavya Model Residential School.


While people are unhappy with this increase in cess and questioning government’s proposal, former HRD secretary Ashok Thakur said that the fund should be used for education purpose only. “The Finance Ministry should be transparent in informing how much fund they have collected from the education sector and how much of it is used in developing it,” said Thakur.

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