The education cess for Secondary and Higher education would become inactive from 1st June 2015 that would come out with certain impacts on the financial status of the country. According to Finance Minister Arun Jaitley the education cess would be incorporated in the Central excise duty improving the overall budget.
Recently, the present 12% service tax would come up with certain additional values. The percentages are as follows:
- Education Cess (EC): 2%
- Secondary and Higher Education Cess (SHEC): 1%
The above-mentioned vales would become active over the existing service tax of 12% recognized as the levied tax. The cesses are fixed upon by the Union in order to improve the educational system of the country. The previous tax rate of 12.36% therefore would be increased to 14% helping a better spread of education.
Status of the Finance Bill
The Finance Bill 2015, consists of the Clause 106 asks for the amendment of section 66B enhancing the service tax from 12% to 14%. Apart from this, 2 other Clauses 179 and 187 reveals the following features:
- Section 95 of the Financial Act, 2004 that divulges levying education cesses
- Section 140 of the Financial Act, 2007 that divulges levying SHE cesses
Overall, this is the real status of the Finance Bill representing the recent condition of the Indian budget. Levy cesses for the education sectors would continue as the levied on income tax and customs because these are not included in the tax rates.
How to create the secondary and higher education ledger?
Here are the steps revealing the useful features regarding certain useful features of the 2 types of education cess. Consider the following points:
Input the accurate name of the school for which you want to create the cess ledger
Choose the duties and taxes that’s identified as the group name under particular field
Select the right excise from the duty or tax list, as mentioned in the suitable field
While you come to the Excise Accounting Code filed you need to enter the effective accounting code for the successful execution of the process
You would get familiar with the Duty Head field where you need to select the secondary education cess from the entire list carrying the duty heads
Now, you need to alter the option “set the values” to the suitable no
Enter 1% in the percentage of calculation field that would come out as the percentage calculating the real duty
For the method of calculation field you would input the defaults Tally ERP 9 to make the suitable execution
Finally, you would pick up “not applicable” option for the rounding method field
Therefore, you can get a clear view about the education cesses knowing the details divulging the important features.