Union Budget 2022: FM clarifies, ‘Health and Education Cess' not allowed as business expenditure

1 Feb 2022 , 04:58 PM

The Finance Minister Nirmala Sitharaman while presenting Union Budget 2022 today, clarified that ‘Health and Education Cess’ is not allowed as a business expenditure. The FM announced her fourth budget in Parliament.

The Union Finance Minister stated that the income tax is not an allowable expenditure for the computation of business income. This includes tax as well as surcharges.

The ‘Health and Education Cess’ is imposed as an additional surcharge on the taxpayer for funding specific government welfare programs, she explained.

Noting that some courts have allowed ‘Health and Education Cess’ as business expenditure, which is against the legislative intent, the Union Finance Minister reiterated that any surcharge or cess on income and profits is not allowable as business expenditure.