FM Sitharaman clarified that a suggested amendment in the Budget related to the education cess must be included to be impartial to all taxpayers. The budget has desired amendment in the Income Tax Act from the year 2005-06 to clarify that education cess and tax will not be deducted in the form of expenditure.

“Some courts are coming up with a judgment which is disobedient to the intent of the legislature. We had to come out with a descriptive amendment. There are times when you have to be retrospective to be fair. It is not to go with any other intent,” Sitharaman said at a post-budget interaction organised by industry body FICCI.

The explanatory memorandum provided with the Finance Bill has explained in detail the idea behind the move. It has referred to a decision made by the Supreme Court that pointed out that the provisions of the Finance Act, 2004 and Finance Act, 2011 says that education cess was an additional tax charged on income tax.