Cess means tax on tax, levied by the government for a specific purpose. Generally Cess is expected to be levied till the time the govt. gets enough money for that purpose.
Cess collected for a particular reason has to go towards the purpose for which it was charged. It cannot be used for, or diverted, to other purposes.
The new cess the government has proposed to levy, called Health and Education Cess, is being collected with the aim of addressing the educational and healthcare needs of rural and below poverty line (BPL) families. It is proposed to be levied on personal income tax and corporation tax, at the rate of 4%.
This 4% rate is applicable from FY 2018-19 / AY 2019-20.
Till FY 2017-18 / AY 2018-19, the rate of Education cess was 3% ( 2% cess for Primary education and 1% cess for Secondary & Higher education). It was levied on Personal income tax and Corporation tax.