Construction Welfare Cess under Code on Social Security, 2020

Why in News

The Centre notified a 1% construction welfare cess under Section 100(1) of the Code on Social Security, 2020.

Coverage and Exemptions 

• The cess applies on total construction cost incurred by employers for building activities.
• Commercial construction projects remain fully covered under the levy.
• Individual houses costing below ₹50 lakh are exempt from the cess from 21 November 2025.
• Earlier exemptions applied to houses below ₹10 lakh or under 100 square metres.

Worker Welfare and Administration

• The cess funds are managed through Building and Other Construction Workers Welfare Boards.
• Welfare measures include health support, insurance, pensions, and educational assistance.
• The Centre plans integration of cess benefits with Employees’ State Insurance Corporation (ESIC) healthcare.

Regulatory Framework

• The Code on Social Security, 2020 is one of India’s four labour codes.
• Rule 42 of Draft Social Security Rules, 2025 provides a self-assessment mechanism for cess payment.
• The self-assessment must be certified by a chartered engineer.
• The CBDT granted Section 10(46) tax exemption to the West Bengal Construction Workers Welfare Board in 2026.