INTERVIEW QUESTIONS TAX EDUCATION CESS , SURCHARGE DETAILS

Question: How Education Cess works?

Answer: Example 1: Individual

Let's say an individual has income of ₹800,000, and his tax liability is ₹85,000. In addition to this tax of ₹85,000, he will to pay a 3% education cess on the amount. Education cess works out to ₹2,781 (education cess of ₹1,700 and secondary and higher education cess of ₹850). So the total tax liability of the individual will go up to ₹87,781.
Example 2: Domestic Company

A domestic company has an income of ₹1,000,000 with tax payable of ₹300,000. On this tax, there will be an education cess of ₹6,000 (2%) and secondary and higher education cess of ₹3,000 (1%). So, the total tax liability of a domestic company will be ₹309,000.
Example 3: AOP (Association of Persons) and BOI (Body of Individuals)

An AOP/BOI has an income of ₹900,000 and a tax liability of ₹110,000. When you add the education cess of ₹2,200 and a secondary and higher education cess of ₹1,100, the total tax payable increases from ₹110,000 to ₹113,300.

Similarly, the education cess is applicable to all the other tax payers like Hindu Undivided Families (HUFs), firms, co-operative societies, and foreign companies.

Example 1: Individual

Let's say an individual has income of ₹800,000, and his tax liability is ₹85,000. In addition to this tax of ₹85,000, he will to pay a 3% education cess on the amount. Education cess works out to ₹2,781 (education cess of ₹1,700 and secondary and higher education cess of ₹850). So the total tax liability of the individual will go up to ₹87,781.
Example 2: Domestic Company

A domestic company has an income of ₹1,000,000 with tax payable of ₹300,000. On this tax, there will be an education cess of ₹6,000 (2%) and secondary and higher education cess of ₹3,000 (1%). So, the total tax liability of a domestic company will be ₹309,000.
Example 3: AOP (Association of Persons) and BOI (Body of Individuals)

An AOP/BOI has an income of ₹900,000 and a tax liability of ₹110,000. When you add the education cess of ₹2,200 and a secondary and higher education cess of ₹1,100, the total tax payable increases from ₹110,000 to ₹113,300.

Similarly, the education cess is applicable to all the other tax payers like Hindu Undivided Families (HUFs), firms, co-operative societies, and foreign companies. Source: CoolInterview.com

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