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October 2011

After education, a health surcharge ?

By Raman Jokhakar, Tarunkumar Singhal
Chartered Accountants
Reading Time 2 mins
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You may soon have to pay more tax since the government is considering a proposal to levy a surcharge to fund its ambitious plan of providing free healthcare to every citizen in the country.

The Planning Commission’s expert panel that has recommended a levy on universal health coverage has turned down the proposal for a securities transaction tax, and has instead voted for a health surcharge on taxable income to fund the scheme.

The move, it said, would complement the government’s budgetary allocation and also ‘obviate the need for user charges on the rich’.

Cess Pool
(1) Govt. collects Rs.27,500 cr via education cess.
(2) Another Rs.17,700 cr collected by cess goes for construction and maintenance of high ways.
(3) Over Rs.15,000 cr collected as surcharge on corporation, income tax.
(4) Other cesses and surcharges levied by the Centre include those on tobacco, pan masala, salt, among others.
(5) All cesses and surcharges add up to Rs.79,000 cr or 8.5% of total revenues.
(6) They are used for various purposes — from funding calamity relief and contingencies to clean energy.
(7) Govt. had levied cess to fund Kargil war, meet spending needs post Gujarat quake. Both cesses have lapsed. (Source : The Times of India, dated 16-8-2011)

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