Union Budget 2021: If FM Nirmala Sitharaman imposed corona cess, know how will affect your tax liability

During the first term, the Modi government of the Center had implemented 4% Health and Education Cess in the Budget 2018. Earlier, 3 percent cess was applicable, including 2 percent education and 1 percent senior secondary education. Let us know that if this time the center has implemented Corona virus cess, then your tax liability will increase.

New Delhi. Union Finance Minister Nirmala Sitharaman will present the Budget 2021-22 (Budget 2021) in Parliament on 1 February 2021 at 11 am. It is believed that due to Coronavirus Crisis, this time budget will be very special. At the same time, it is also in full swing that the Central Government implements COVID-19 surcharge, ie CESS, to arrange funds to meet the additional expenditure to deal with the global pandemic. Can do. If this happens, the liability of taxpayers will increase. Let’s understand what the cess is and how it will affect the tax liability.

Health and education cess was introduced in budget 2018

The Central Government currently levies 4% Health and Education Cess on Direct Tax Liability of Individual Taxpayer. Former Union Finance Minister Arun Jaitley introduced these two cesses in the Union Budget 2018. Earlier, a total of 3 percent cess was collected. This included 2 percent Education Cess and 1 percent Senior Secondary Education Cess.

 

GST collection expected to be at record level in January, estimated at Rs 1.23 lakh crore

 

cess, 1% increase in cess, then how much tax liability will increase

Before Finance Minister Sitharaman declares Corona Cess in Budget 2021, let’s understand how it can affect your tax liability. If the tax liability of an individual taxpayer is 50 thousand rupees and 4% cess is imposed on it, then his total tax liability will be Rs 52,000. In easy terms, if your tax liability was Rs 50 thousand earlier, then after paying 4% cess, you will have to pay an additional Rs 2,000. Now if 1 percent corona cess is implemented in budget 2021, then your tax liability will be Rs 52,500.

to raise funds

for a special purpose. Is charged. For example, health and education cess is charged to raise funds to meet the health and education needs of rural India. In such a situation, the cess gathered to fulfill a particular need cannot be used for any other purpose. Explain that the cess applies to your total tax liability. For example, if the tax liability of a person after all types of tax exemption is Rs 50,000, then 4% cess is charged on this amount.

The post Union Budget 2021: If FM Nirmala Sitharaman imposed corona cess, know how will affect your tax liability appeared first on informalnewz.