Centre pegs 9.4% growth in FY26 cess, surcharge collections at ₹5.91 lakh crore

The central government has given a budget to collect around Rs 5.91 lakh crore from cess and surcharge in the current financial year, an increase of 9.43% on the collection in FY 25, Parliament was informed on Tuesday (July 29, 2025).

According to the data shared by the government in the Rajya Sabha, the Center has given a budget to collect about ₹ 4.18 lakh crore from the cess and ₹ 1.72 lakh crore from surcharge in FY 26. This is more than FY25 cess and overload collection respectively, respectively and 3.87 lakh crores and .5 1.53 lakh crore.

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In a written reply to a question in the House, Finance Minister Pankaj Chaudhary said that under Article 271 of the Constitution, cess and surcharge is levied by the Central Government for the purposes of the Union.

He said, “Such surcharge and cess income goes towards meeting certain specific requirements such as funding of centrally sponsored schemes. The benefits of such expenses also include the benefits in the states,” he said.

Responding to a separate question in the House, Finance Minister Nirmala Sitaraman said that the government collected in 2024-25 and 83,071 crore, which spent ₹ 87,199 crore from Kitty, while imposing health and education cess.

In addition to income tax during the last three years, Ms. Sitarman said in 2023-24 and 2022-23, giving details of the amount of health and education cess collected from income tax payers that the government collected ₹ 69,891 crore and ₹ 60,616 crore from CESS respectively.

During FY24 and FY23, the expenditure from health and education cess kitty was for 80,010 crore and ₹ 70,589 crore respectively.

The gross tax collected by the Center becomes part of the revenue divisive pool and is distributed between the Center and the states. The collection from surcharge and cess does not form part of the divisive pool and therefore is not shared with the states.

Currently, 8 are in different cess operations. These are agricultural infrastructure, development cess, cess on crude oil, cess on exports, GST compensation cess, health and education cess, national disaster contingency duty and infrastructure cess.

Corporate tax, income tax and social welfare surcharge are overloaded under customs.

States, especially ruled by opposition parties, are making a case to include cess collection in the divisible pool. Currently, the center is 41% of the taxes collected for states.