Glossary term
Cess
A 4% surcharge applied on top of income tax to fund health and education programs. Levied on every taxpayer above the basic exemption.
The Health and Education Cess is a 4% surcharge applied to the income tax (plus surcharge, if applicable) for every taxpayer above the basic exemption limit. It's not an additional deduction or rebate — it's a flat add-on the government uses to earmark funds for health and education spending.
Cess applies in both Old and New Regimes. The 'true' income tax rate including cess is therefore 5.2%, 10.4%, 15.6%, 20.8%, 26%, and 31.2% across the slab brackets.