Tax Deduction of Tution Fees.
Tax Deduction on Tuition Fees under Section 80C
Section 80 C of the Income Tax Act has provisions for tax deductions on tuition/education fees paid by a parent towards educating his/her children. Taxpayers can avail of deductions up to Rs 1.5 lakh under Section 80C with other investments also eligible for this rebate.
Parents can claim the tuition fee paid by them towards their children’s education as deductions, ensuring that they save TAX even if they don’t have other tax-saving instruments. Parents can claim the actual fee paid by them in a particular financial year.
Tuition Fees Eligibility for Tax Deduction under Section 80C
Claimant Eligibility: Only parents or legal guardians can claim this deduction, which also extends to fees paid for adopted children.
Individual Assessee: This deduction is exclusively available to individual taxpayers. Hindu Undivided Families (HUFs) and corporations are not eligible for this deduction.
Number of Children: Each parent can claim this deduction for a maximum of two children. If both parents are taxpayers, they can collectively claim deductions for up to four children.
Maximum Limit: The highest deduction limit is Rs 1.5 lakh per financial year.
Maximum Age: There is no specified minimum age requirement for the child.
Tuition Fee: The deduction pertains solely to full-time educational fees and does not include development fees, donations, private coaching charges, or other expenses such as hostel and library fees.
Recognized Institution: The educational institution must be located in India and possess the requisite affiliations.
Deduction Mode: This deduction is applicable only based on actual payment, not based on amounts payable.
Payments not eligible for Tax Deduction
Tuition fee deduction does not cover the following educational expenses:
One-time school admission charges
Transportation costs
Charges for extra classes
Fee for curricular activities
Charges for smart classes
Costs related to sports and activity classes
Expenses for coaching or private tuition
Hostel fees
Mess charges
Boarding fees
Library costs
Stationery expenses
Excursion fees
School donations or college donations
School development work charges or college development work charges
Late school payment
Readmission fees
(The list above is not exhaustive)
In addition to the aforementioned exclusions that pertain to non-deductible tuition fees, other exclusions cannot be claimed as deductions under Section 80C despite being categorized as tuition fee expenses. These mainly include:
Tuition fees for part-time courses
Tuition fees paid to foreign institutes, or colleges, or universities
Tuition fees that are not paid for children but for oneself, a spouse, brother, sister, or relative
Tuition fees for Indian schools in foreign countries
Tax Deduction on Tuition Fees under Section 10
Section 10 of the Income Tax Act offers an additional tool for taxpayers to save some of their tax. Under this provision, salaried individual taxpayers are eligible to save tax to the tune of Rs 100 per month per child.
This amount can be availed for a maximum of 2 children per taxpayer, which means that an individual taxpayer is eligible for tax exemption of Rs 200 per month. This amount can be claimed as an exemption only in the financial year in which the fee was paid.
In addition to this exemption, one can also claim an exemption on hostel costs on his/her children. This hostel allowance is capped at Rs 300 per month per child, subject to a maximum of 2 children.
Tuition Fees Eligibility for Tax Deduction under Section 10(14)
The eligibility criteria for claiming a deduction in the tuition fees under Section 10(14) of the Income Tax Act, 1961, are as follows:
The deduction is available to individuals employed in India.
The educational expenses must be incurred within the territory of India to qualify for the deduction.
There is no specific minimum age requirement for claiming the Children's Education Allowance.
The maximum age for reimbursement eligibility is 20 years for typically developing children and 22 years for specially-abled children.
The educational institution where the tuition fees are paid must be recognized by either the Central, State, Union Territory, or any other authorized educational authority.
The deduction in the tuition fee is applicable for up to two children.
If both spouses are individual taxpayers, they can collectively claim the income tax benefit for a maximum of four school-going children, provided all these children attend schools within India.
The deduction can also be claimed by any taxpayer who is the legal guardian of school-going children, either due to adoption or in cases of parental absence.
Single parents of school-going children and unmarried guardians of school-going children can avail of the tuition fee deduction for income tax purposes when they are sending their children to accredited schools situated in India.
Types of Fees Reimbursable under Section 10(14)
Section 10(14) of the Income Tax Act 1961 allows for the reimbursement of the following types of fees:
Tuition fees
Examination fees
Fees for specialized courses in fields like agriculture, electronics, music, and more.
Other fees that are essential for a child's education.
Comments
Post a Comment