Question

Health and Education Cess is :

• A. 4%
• B. 7%
• C. 8%
• D. 10%

Hint:

The cess is charged on income tax plus surcharge. Its rate has been 4 percent since 2018.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
Health and Education Cess is an extra charge that the Central Government adds to income tax. The money is used to fund health and education schemes.

Step 2: Key Rule:
The cess is charged on the amount of income tax plus surcharge (if any). It is not charged on income directly.
Since the Finance Act, 2018, the rate is 4 percent. Before that, there was a 3 percent cess (2 percent education cess and 1 percent secondary and higher education cess).

Step 3: Example to see the rule at work:
Suppose the income tax payable is ₹ 50,000 and there is no surcharge.
Cess = 4% of 50,000 = ₹ 2,000.
Total tax payable = 50,000 + 2,000 = ₹ 52,000.

Step 4: Why the other options are wrong.
(B) 7% is not any cess rate on income tax.
(C) 8% is not any cess rate on income tax.
(D) 10% is a common surcharge rate for some income levels, not the cess rate.

Final Answer:
Health and Education Cess is 4 percent, option (A). \[ \boxed{4\%} \]