The assessee is  a citizen of USA and was residing permanently in India. The assessee declared income of Rs. 668.30 lakhs out of which income earned in India amounted to Rs. 9.13 lakhs. The CPC processed the return of income and raised demand of Rs. 3.11 lakhs after levying education cess on entire tax including DTAA rates. first appeal, the assessee submitted that the rates as specified in DTAA included surcharge and surtax. The education cess would be applicable only for income earned in India.  Commissioner (Appeals) rejected the same on the ground that education cess is an additional levy that is applied on the basic tax liability by the Government to generate revenue for education. On appeal the Tribunal held that,  as per Article 2(1)(b)(i) & (ii) of India-USA DTAA, surcharge and surtax are included in maximum rates as specified under Articles 10 and 11 of DTAA. Therefore  tax rates as prescribed under DTAA would embed education cess as well. The CPC is directed to  recompute the tax liability.relied on   DDIT v. BOC Group Ltd (2015) 156 ITD 402(Kol)(Trib),ITO v. M. Far Hotels Ltd(2013) 32 taxmann.com 100/58 SOT 261(Cochin)(Trib), Sunil V. Motiani v. ITO (IT) (2013) 33 taxmann.com 252/59 SOT 37 (Mum)(Trib)(AY. 2022-23)