Swachh Bharat: Are you ready to be taxed?

The Swachch Bharat Abhiyan is a Government run initiative that focuses on cleaning India’s public spaces and infrastructures. Since its inception on 2nd October 2014, the movement has gathered much interaction amongst the citizens itself. In line with the budget being announced last month in March, the Government of India has said that a cess will be levied for Swachh Bharat Abhiyan.

What does this mean for citizens in India? Here are a few pointers that break down and simplify what the 2% Swachh Bharat Tax is all about-

1. No lifelong tax payment for Swachh Bharat Abhiyan

Finance Minister Arun Jaitley has laid down a provision to charge tax at a rate of 2 per cent or less on certain services, should there be a need for raise funds for the Swachh Bharat Abhiyan initiative. As of now, there is no need for the common man to pay a lifelong tax for the Swachh Bharat Abhiyan.

2. Swachh Bharat Tax to be calculated only on select services

The Government has identified select services where more than 2% tax will be calculated for Swachh Bharat Abhiyan. So far the list has telecommunications, insurance, manpower recruitment agencies, hotels and restaurants that are able to maintain businesses above a certain threshold. The revenue department is currently preparing a final list of services that will attract this 2% tax.

3. 100% tax exemptions for contributions made to Swachh Bharat Kosh

There will be 100% tax deductions/exemptions made to persons/parties that are contributing to the Swachh Bharat campaign – other than by way of Corporate Social Responsibility activities held by companies. This comes in view of the Government’s way to encourage companies’ participation in Swachh Bharat Abhiyan activities.

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