Budget 2021: Get Ready To Pay Covid Cess For Pandemic-Expenses; Who Will Need To Pay?
Since the Covid-19 pandemic has wreaked havoc all across, India’s economy is witnessing a downward spiral never seen before. Jobs are being cut, Govt spending has been reduced, and focus is on reviving the economy.
In this endeavor, Govt may impose a fresh ‘Covid-19 cess’ on some tax payers, so that Govt may get more funds for handling the pandemic related expenses.
This new cess can be introduced in the Budget 2021 announcements.
Here are the details..
New Covid Cess For Taxpayers?
On February 1st, Govt of India will announce the annual budget, and speculations are rife that a new Covid cess can be introduced to generate more revenues.
An unname Govt source said, “Proposal for a cess has been discussed,”
It’s estimated that Govt will incur an additional expense of Rs 60-65,000 crore for pandemic related schemes and activities, which also include vaccination for 3 crore frontline workers and healthcare employees.
This expense can be offset by the new Covid cess.
Who Will Need To Pay This Cess?
As per the reports, this new Covid cess can be imposed on the high-net worth individuals in India, whose income is in the top 2-5% bracket.
Besides, some indirect taxes can be also levied.
A new cess on petroleum and diesel products is also possible, besides new extra excise duties and taxes, as part of this cess.
Besides the vaccination cost, Govt of India has already announced new schemes under Atmanirbhar Bharat Rozgar Yojana, and several rural-centric scheme to pump up the economy, and to trigger a economic stimulus.
States Have Already Started Additional Covid Cess
Some state governments have already started imposing additional taxes and cess for generating more revenues in the pandemic.
In Punjab, for instance, Govt introduced new cess for liquor related products.
In Delhi, 70% cess on liquor was introduced, which was later taken back. But VAT has certainly increased.
We will keep you updated, as more details come in.