"Health And Education Cess" A Business Expenditure? Finance Minister Explains

The "Health and Education Cess" is not allowed as a business expenditure, Union Minister of Finance Nirmala Sitharaman clarified while presenting the Union Budget today and stressed the need to impart supplementary teaching and to build a resilient mechanism for education delivery.

The Union Minister pointed out that due to the pandemic-induced closure of schools, children have lost almost two years of formal education.

The Union Finance Minister stated that the income tax is not an allowable expenditure for the computation of business income. "This includes tax as well as surcharges," she said.

"The 'Health and Education Cess' is imposed as an additional surcharge on the taxpayer for funding specific government welfare programs," she explained.

Noting that some courts have allowed "Health and Education Cess" as business expenditure, which is against the legislative intent, the Union Finance Minister reiterated that any surcharge or cess on income and profits is not allowable as business expenditure.

To boost the education sector in the country, Nirmala Sitharaman said that 'One Class, One TV Channel' program of PM e-VIDYA will be expanded from 12 to 200 TV channels.

"This will enable all states to provide supplementary education in regional languages for classes 1 to 12."

With schools shut due to Covid, children, particularly in rural areas and those in SCs/STs and other weaker sections have lost almost two years of formal education. Noting this, the Finance Minister said, "In select Industrial Training Institute (ITIs), required courses for skilling will be started."

"We recognize the need to impart supplementary teaching and to build a resilient mechanism for education delivery. For this, the "One Class, One TV" channel programme of e-VIDYA will be expanded from 12 to 200 TV channels," she said.