Difference between Cess and Surcharge, Key Points

Q: What is the difference between cess and tax?

A tax is a general revenue source for the government, while a cess is levied for a specific purpose like education or health.

Q: What is the difference between a surcharge and a tax?

A surcharge is an additional charge on existing taxes, usually applied to high earners, whereas a tax is a standard levy on income, goods, or services.

Q: What is education cess and surcharge example?

For someone paying ₹1 lakh in income tax, a 4% education cess means ₹4,000 more; if income is above ₹50 lakh, a 10% surcharge adds ₹10,000 more.

Q: Is Surcharge an indirect tax or direct tax?

Surcharge is a direct tax, levied on the income of individuals or entities.

Q: What is difference between surcharge and cess?

Surcharge increases the existing tax burden for high earners, while cess is collected from all taxpayers for a specific welfare goal.

Table of Contents☰

Cess and Surcharge are two types of taxes laid down by the Government on the citizens in order to collect revenue for government functioning. Students need to understand the difference between both the taxes for a better understanding of their significance and their functions. In this article, we are going to cover the differences between Cess and Surcharge.

Cess Tax

Cess is a tax applied on a tax. Put simply, the Government of India uses this tax on tax liability, including surcharge, for a very specific purpose. This tax applies to all taxpayers. For example, the government collects cess for the purpose of education. Now this collected cess will be particularly be used for the purpose of education only.

Cess tax is deposited in the Consolidated Fund of India and is applicable for the singular purpose it has been charged for. Once the purpose of Cess Tax is complete, the tax gets dissolved.

Cess Tax Types

There are many types of Cess levied in India. These include:

Infrastructure Cess on motor cars
Krishi Kalyan Cess on Service Value
Swachh Bharat Cess
Education Cess
Cess on Crude Oil
Cess on Exports
Road and Infrastructure Cess
Duty on Tobacco and Tobacco Products
Health and Education Cess on Income Tax

What is Surcharge?

A Surcharge tax is applied on people earning more than Rs. 50 lakhs. Unlike the Cess, the surcharge is not collected for any specific purpose but only for general use by the Government of India. This tax is applicable on the tax payable and not the total income. Surcharge is also collected in the Consolidated Fund of India and used for multiple purposes.

Difference between Cess and Surcharge

Following is the difference between Cess and Surcharge:

Surcharge	Cess
An additional charge on existing taxes (like income tax).	A tax levied for a specific purpose (like education, health).
Applied to high-income earners or entities.	Collected from all taxpayers, as applicable.
Revenues go to the Consolidated Fund of India and can be used for any purpose.	Ideally earmarked for the specific cause for which the cess is levied.
Example: 10% surcharge on income above ₹50 lakh.	Example: 4% Health and Education Cess on income tax.

Similarities between Cess and Surcharge

Cess and Surcharge both are levied by the Central Government and collected in the Consolidated Fund of India. The state government does not get any share in both these taxes.

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