Education cess raised to 3%

In the Budget for the fical year 2007-08, Finance Minister P Chidambaram has imposed an additional cess of 1 per cent on all direct taxes to fund secondary and higher education.

This would also be used towards expansion of capacity by 54 per cent for reservation for socially and educationally backward classes. The present 2 per cent education cess to fund basic education will also remain.

Surcharge on income tax on all firms and companies with a taxable income of Rs 1 crore or less has been removed. This will benefit about 12 lakh firms and companies.