Health and Education Cess

Health and Education Cess (HEC) is a 4% levy applied to your total income tax liability including surcharge under the Income Tax Act 2025. The cess was introduced to fund the Prime Minister’s Health Insurance Scheme and the Samagra Shiksha Abhiyan for school education. It is calculated as 4% of the aggregate of income tax and surcharge. Unlike surcharge which has multiple brackets based on income level, HEC is flat at 4% for all taxpayers regardless of income. The cess is not deductible as an expense — you pay it on the tax itself, not from your income. It applies to all individuals, HUFs, firms, companies, and other entities. The HEC is collected by the Income Tax Department and transferred to the Consolidated Fund of India for allocation to health and education programmes.