Wednesday, June 01, 2016

LearnNBlog #7: Tax & Cess

Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.
- Benjamin Franklin

From 1st June, 2016, we the people of India have one more element added to our tax burden - the Krishi Kalyan Cess. This cess will be applicable on all cases where Service tax is paid and will be 0.5% over and above the earlier taxes (Service Tax and Swachh Bharat Cess).

So what's the difference between a Tax and a Cess?
As per Investopedia, taxes are generally an involuntary fee levied on individuals or corporations that is enforced by a government entity, whether local, regional or national in order to finance government activities. Taxes are direct, to be paid on the income, or indirect, to be paid for a goods or service received.

Cess is a an alternative term for tax. In most places tax and cess mean the same thing. However in some countries, there are some differences. In India, a cess is a tax collected for a specific purpose e.g. Education Cess, Swacch Bharat Cess etc. 

Whats in a name? Whether Tax or Cess, just another name for the government to take more of our hard-earned money.

Other Readings

Previously on LearnNBlog - American Handball

1 comment:

Monica Mahto said...

Clear and simple description - I've used these terms over the years but never thought about the nuances.