In the Budget 2007-08, an additional cess of one per cent on all direct taxes has been levied to fund secondary and higher education. This would also be used towards expansion of capacity by 54 per cent for reservation for socially and educationally backward classes. The present 2 per cent education cess to fund basic education will also remain.
Surcharge on income tax on all firms and companies with a taxable income of Rs. one crore or less has been removed. This will benefit about 12 lakh firms and companies.