Budget 2021: Government mulls health and education cess hike of up to 2%

The government is contemplating hiking health and education cess by up to two percent to fund healthcare expenditure. People in the know have further told CNBC-TV18 that the Revenue Department of the Finance Ministry is reviewing such a proposal currently and deliberations are underway.

It is noteworthy that currently, four percent health and education cess is levied on the direct income tax; irrespective of the income tax slab. Now, according to sources, a hike of upto 2 percent may be announced by Finance Minister Nirmala Sitharaman when she presents the union budget on February 1.

Currently, the health and education cess garner around Rs30,000 crore and the Finance Ministry is in favour of increasing health insurance cover under Ayushmaan Bharat.

Under PMJAY – Jann Aarogya Yojana gives an annual coverage per family of Rs 5 lakh, currently covering approx 10.74 crore poor and vulnerable families as per the SECC 2011 data, which is approximately 40 percent of the Indian population.