How to Get Tax Benefits on Tuition Fees for Your Children?
Section 80C is one of the most common deductions for taxpayers in India. Individuals can claim tax deductions of up to Rs. 1.5 lakh in a financial year under this Section for a variety of investments and expenses. Besides getting deductions for investment in EPF, PPF, NSC, and NPS, you can also claim tax benefits on tuition fees under Section 80C.
The main purpose of offering tax deductions on the payment of children’s tuition fees is to achieve a higher literacy rate and promote the education of children. Now, let us learn about the tax benefits available on tuition fees under Section 80C.
Income Tax Benefits on Tuition Fees in India
Parents can claim the tuition fees paid for their children’s education as deductions for a particular financial year. They can claim this deduction for tuition fees paid to a registered school, college, university or any other educational institution.
The tax benefit on tuition fees is applicable for fees paid for up to two children. So, a couple can claim this tax benefit on tuition fees for up to 4 children. Only an individual paying the actual fees and having a taxable income can claim deductions u/s 80C. Only tuition fees paid for full-time courses are eligible for deductions.
The maximum deduction one can claim for tuition fees is Rs. 1.5 lakh. The aggregate amount of deduction under Section 80C, Section 80CCC and Section 80CCD cannot exceed this limit. If you cannot claim the full deduction u/s 80C, you can add your children’s tuition fees to get the full deduction.
Section 10(14) allows a tax exemption of up to Rs. 100 per child for up to 2 children. It also offers tax benefits of up to Rs. 300 per child if he/she goes to a boarding school. The tax benefit is applicable for tuition fees, admission fees, special fees, purchase of books, etc.
Also Read: Section 80CCC Of Income Tax: Importance, Eligibility, And Deductions
Eligibility for Income Tax Benefits on Tuition Fees
Taxpayers wanting to claim tax deductions u/s 80C need to remember the following eligibility criteria.
- Who can claim: Only individual taxpayers and HUFs (Hindu Undivided Family) can claim deductions u/s 80C. Unmarried persons or divorced parents can also claim it
- Eligible institutions: Affiliated schools, colleges, universities, pre-schools, etc., in India
- Courses covered: Only full-time courses, including play school activities, nursery classes, etc.
- How many children: Deductions are available for two children for each individual. So, both parents can claim deductions for a maximum of 4 children.
- Limit of deduction: Each parent can claim up to Rs. 1.5 lakh in tax deductions in a financial year, individually.
If both parents work and pay taxes, they can claim tax benefits on tuition fees separately. So, if the father has paid Rs. 1,00,000 in school fees and the mother paid Rs. 40,000, they can claim both amounts as tax deductions.
What Payments are not Covered u/s 80C for Tuition Fees?
The following is a list of education-related payments not eligible for deduction under Section 80C:
- You cannot claim tax benefits u/s 80C on paying tuition fees for your own studies.
- It is also not available for tuition fees paid for the education of your spouse, brother, sister, parents, etc.
- The deduction will be applicable on a payment basis. So, it will apply to the actual date and amount of fees paid. If you paid fees for March 2021 in April 2021, it would not be eligible for deduction in AY 2021-22.
- It is applicable for only full-time courses and not part-time or distant learning courses.
- Deductions u/s 80C are not applicable for private tuition or coaching classes.
- Fees paid to a foreign institution located outside the country are not covered.
List of Education Fees not Covered by Section 80C
Section 80C only offers tax benefits on tuition fees for your children. It does not cover other education-related expenses like:
- Development fees
- Donations
- Transport charges
- Fees for late payment
- Hostel charges
- Mess charges
- Library fees
- Cost of distant education courses
- Cost of books, uniforms, study materials, etc.
Final Word
The Indian government has allowed several tax benefits on tuition fees for children. Section 80C allows tax deductions of up to Rs. 1.5 lakh to each parent for paying tuition fees of up to 2 children. Meanwhile, Section 10(14) allows tax benefits of Rs. 100 as education allowance per child.
FAQs on Tax Benefits on Tuition Fees
Ans: Section 10(14) covers any fee levied directly by a school for your child’s education. This includes tuition fees, laboratory fees, admission fees, charges for practical work, library fees and fees for games, sports and extracurricular activities, etc.
Ans: You will have to enter the details of deductions you want to claim under Section 80C. To do this, fill out the ITR-1 form and enter details of any tax-saving investments/expenses under Section 80C. You will find the space to provide the data in the first row under ‘Part C- Deductions and Taxable Total Income’.
Ans: Yes, you can claim an additional deduction of Rs. 50,000 over and above the limit of Section 80C under Section 80CCD(1B). This allows deductions for a contribution towards a Tier-I NPS account in a financial year, taking the total limit u/s 80C to Rs. 2 lakh.
Ans: There are no minimum age requirements for claiming tax benefits on children’s education allowance u/s 10(14). The maximum age of one’s children for this benefit should be 20 years, whereas 22 years is the limit for physically challenged or specially-abled children. The child’s educational institution has to be recognised by the Central Government, any state government, university or recognised educational authority.
Ans: These are common investment options and expenses against which one can claim tax deduction u/s 80C:
a) Premiums paid for life insurance policy
b) Repayment of principal component of home loan
c) Children’s tuition fees for school
d) Contribution to NPS (for both employee and employer)
e) Investments in PPF, EPF, ELSS mutual funds, NSC, etc.
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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