What Is The Full Form Of HEC In Income Tax?
HEC full form in income tax is Health and Education Cess. It’s an extra tax that the Indian government adds on top of the regular income tax people and companies need to pay. This 4% cess was introduced in the 2018 Union Budget, replacing the earlier 3% education cess. Its aim is to help improve schools and healthcare for people living in the countryside or who don’t have much money.
How is it Calculated?
The government figures out this 4% tax based on the total amount of income tax and extra charges you need to pay. For example, in case your taxes due are ₹52,500, to this, you will need to add another ₹2,100 for HEC. So, in total, you will have to pay ₹54,600. This surcharge applies to all taxpayers, irrespective of their level of income.
Purpose and Utilization:
The money from this tax is used to make education and healthcare better. It helps in the payment of things like free meals at school and paying for better medical services. Also, it’s the development of better school facilities for children in tribal areas and the development of better tools for learning online. Apart from this, it also supports the payrolls of teachers with the growth and development of leading education institutes in various states.
Legal Rules and Following Them:
The law says this tax will keep going until it achieves its aim of better health and education for everyone. It is not unimportant to say that, anyhow, companies could not take this tax away as a business expense. This is very good since the HEC is purposeful to serve society and not to give any business a tax break.